Research Note th June Council liabilities

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1 Research Note th June 2014 Council liabilities Public sector debt is forecast by the Office for Budgetary Responsibility to exceed 1.3 trillion in However, as explained by previous TaxPayers Alliance research 2, this number does not include a range of expensive commitments such as unfunded pension liabilities. This research looks at the indebtedness of local authorities in the UK. It has found large disparities in the size of councils liabilities and the amount they are borrowing, even among similar authorities in the same region of the country. Much of the long-term liabilities are related to the partially funded Local Government Pension Scheme, but 40 per cent take the form of long-term borrowing. This borrowing is mostly from the Public Works Loan Board (PWLB) and market lenders such as commercial banks. The key findings of this research are: Local authorities in the UK owed more than 180 billion in long-term liabilities on 31 st March 2013 an increase of 8.7 per cent on the previous year. This is almost seven times the amount raised in Council Tax in The long-term liabilities added up to 2,828 per person in the UK on 31 st March Long-term borrowing made up almost 72 billion of the liabilities. Long-term liabilities were 66 per cent of long-term assets on 31 st March 2013, up from 60 per cent in the previous year. 38 councils had long-term liabilities of more than 4,000 per resident, 11 of more than 5,000 and 4 of more than 6, councils increased their long-term borrowing during whilst 214 decreased it. 73 councils had no long-term borrowing. 66 of these were district councils, three were London boroughs and four were unitary authorities or metropolitan boroughs _Web_Accessible.pdf#page= Tufton Street, London, SW1P 3QL (office hours) (24 hours) 1

2 Birmingham City Council, the UK s largest local authority, had by far the biggest long-term liabilities at almost 6 billion. Just under 2.8 billion of this is made up of long-term borrowing. Birmingham s liabilities are equal to 5,500 per resident the 8 th highest in the country. Scottish councils have by far the biggest liabilities relative to their size, with average long-term liabilities of almost 4,200 per resident. Commhairle nan Eilean Siar had the biggest long-term liabilities per resident in the UK with 8,174. In England South Tyneside Council had the biggest - 6,125. In Wales Blaenau Gwent had the biggest - 7,789 In the East Midlands: Nottingham City Council had the biggest long-term liabilities at 1.34 billion a five per cent increase on the previous year. Nottingham also had the biggest liabilities per resident - 4, councils had long-term liabilities equal to or more than the value of their longterm assets, including Nottinghamshire County Council. In the East of England: Essex County Council had the biggest long-term liabilities at 1.48 billion a four per cent increase on the previous year. Harlow District Council had the biggest liabilities per resident - 3,808. Three councils had long-term liabilities equal to or more than the value of their long-term assets: Broadland District Council, Fenland District Council and East Cambridgeshire District Council. In London: Croydon had the biggest long-term liabilities at 1.36 billion a 16 per cent increase on the previous year. Islington had the biggest liabilities per resident - 4,777. Brent s long-term liabilities were equal to 93 per cent of the value of its long-term assets. In the North East: Durham County Council had the biggest long-term liabilities at 1.48 billion an eight per cent increase on the previous year. South Tyneside council had the biggest long-term liabilities per resident - 6, Tufton Street, London, SW1P 3QL (office hours) (24 hours) 2

3 Three councils had long-term liabilities equal to or more than the value of their long-term assets: Redcar and Cleveland Borough Council, Darlington Borough Council and North Tyneside Council. In the North West: Lancashire County Council had the biggest long-term liabilities at 2.03 billion a 10 per cent increase on the previous year. The Metropolitan Borough of Knowsley had the biggest long-term liabilities per resident - 3, councils had long-term liabilities equal to or more than the value of their longterm assets including Liverpool City Council. In Northern Ireland: Belfast City Council had the biggest long-term liabilities at 146 million a seven per cent increase on the previous year. Coleraine Borough Council had the biggest long-term liabilities per resident Limavady Borough Council s long-term liabilities were equal to 102 per cent of the value of their long-term assets. In Scotland: Glasgow City Council had the biggest long-term liabilities at 2.78 billion a 10 per cent increase on the previous year. Comhairle nan Eilean Siar had the biggest liabilities per resident in the UK - 8,174. Two councils had long-term liabilities equal to or more than the value of their longterm assets Fife and Dumfries & Galloway. In the South East: Kent County Council had the biggest long-term liabilities at 2.25 billion a one per cent increase on the previous year. Portsmouth City Council had the biggest long-term liabilities per resident - 3,965. Five councils had long-term liabilities equal to or more than the value of their longterm assets, including Surrey County Council and Kent County Council. In the South West: Cornwall Council had the biggest long-term liabilities at 1.42 billion an 11 per cent increase on the previous year. 55 Tufton Street, London, SW1P 3QL (office hours) (24 hours) 3

4 Bristol City Council had the biggest liabilities per resident - 3, councils had long-term liabilities equal to or more than the value of their longterm assets, including Devon County Council and Somerset County Council. In Wales: Cardiff City Council had the biggest long-term liabilities at 1.21 billion a six per cent increase on the previous year. Blaenau Gwent had the biggest long-term liabilities per resident - 7,789. Two councils had long-term liabilities equal to or more than the value of their longterm assets Torfaen and Merthyr Tydfil. In the West Midlands: Birmingham City Council had the biggest long-term liabilities at 5.96 billion a 15 per cent increase on the previous year. Birmingham also had the biggest liabilities per resident - 5,494. Nine councils had long-term liabilities equal to or more than the value of their longterm assets, including Birmingham City Council, Warwickshire County Council and Walsall Metropolitan Borough Council. In Yorkshire and the Humber: Leeds City Council had the biggest long-term liabilities at 3.09 billion a six per cent increase on the previous year. Barnsley Metropolitan Borough Council had the biggest liabilities per resident - 4,795. Five councils had long-term liabilities equal to or more than the value of their longterm assets, including Bradford City Council. 55 Tufton Street, London, SW1P 3QL (office hours) (24 hours) 4

5 Guide to tables: 1. Local authority long-term liabilities by region 2. Local authorities where long-term liabilities exceed long-term assets 3. Local authorities with the biggest long-term liabilities 4. Local authorities with the biggest long-term liabilities per resident 5. Local authorities with biggest percentage increase in long-term liabilities 6. Local authorities with biggest cash increase in long-term liabilities 7. Local authorities with the highest long-term borrowing 8. Local authorities with the biggest percentage increase in long-term borrowing 9. Local authorities with the biggest cash increase in long-term borrowing To see the complete data set click here To discuss the research, please contact: Alex Wild Policy Analyst, TaxPayers' Alliance Financial support for this research paper was provided by the Politics and Economics Research Trust (charity number ). Any views expressed in this paper are those of the author and not those of the research trust or of its trustees. 55 Tufton Street, London, SW1P 3QL (office hours) (24 hours) 5

6 1. Local Authority long-term liabilities by region Region 31 st March 2013 (,000) 31 st March (,000) Increase (%) Long-term liabilities as a percentage of assets on 31 st March 2013 (%) Long-term liabilities per resident on 31 st March 2013 ( ) East Midlands 11,943,014 11,121, ,615 East of England 14,337,071 13,372, ,427 London 27,750,497 24,658, ,340 North East 9,280,448 8,721, ,566 North West 17,127,979 15,262, ,418 Northern Ireland 859, , Scotland 22,091,676 20,630, ,183 South East 18,596,704 18,156, ,131 South West 12,391,352 11,623, ,321 Wales 10,191,154 9,270, ,315 West Midlands 19,140,838 17,061, ,392 Yorkshire and the Humber 16,330,283 14,896, ,072 Total 180,040, ,587, , Tufton Street, London, SW1P 3QL (office hours) (24 hours) 6

7 2. Local authorities where long-term liabilities exceed long-term assets Local authority 31 st March 2013 (,000) 31 st March (,000) Long-term liabilities as a percentage of long-term assets on 31 st March 2013 (%) Sevenoaks 53,247 21, Forest of Dean 33,023 17, Tewkesbury 29,111 16, Hart 32,038 19, Weymouth and Portland 81,289 51, Walsall 758, , Ryedale 26,899 18, Purbeck 16,068 11, West Lindsey 26,120 18, Broadland 22,114 15, Redcar and Cleveland 388, , Gedling 41,730 30, Fenland 52,470 38, Dumfries and Galloway 936, , Teignbridge 68,447 51, South Staffordshire 27,086 20, Hyndburn 57,114 44, Chorley 48,819 38, Fylde 30,668 24, North Dorset 17,651 14, East Staffordshire 57,684 47, Stafford 49,554 41, South Somerset 71,424 60, Amber Valley 63,546 54, South Lakeland 54,296 46, Rossendale 33,497 29, Devon 1,354,324 1,196, Oldham 689, , Birmingham 5,963,700 5,305, Mendip 30,107 26, Merthyr Tydfil 256, , Blaby 26,551 24, Bradford 1,459,331 1,340, Nottinghamshire 1,329,542 1,223, North Tyneside 901, , Surrey 1,387,483 1,295, Craven 34,542 32, Malvern Hills 28,245 26, Tufton Street, London, SW1P 3QL (office hours) (24 hours) 7

8 Local authority 31 st March 2013 (,000) 31 st March (,000) Long-term liabilities as a percentage of long-term assets on 31 st March 2013 (%) Warwickshire 1,064, , Kent 2,247,670 2,108, North East Lincolnshire 318, , South Northamptonshire 34,406 32, Knowsley 567, , East Cambridgeshire 18,528 17, Rushcliffe 40,053 38, Torridge 31,689 30, Liverpool 1,314,214 1,256, Fife 2,290,478 2,199, Wyre Forest 56,489 54, Somerset 994, , Newcastle-under- Lyme 64,592 62, West Somerset 18,980 18, Northamptonshire 1,103,229 1,066, Ribble Valley 16,665 16, Darlington 271, , Wakefield 813, , Wirral 750, , Erewash 35,834 35, Limavady 24,060 23, Isle of Wight 360, , Tufton Street, London, SW1P 3QL (office hours) (24 hours) 8

9 3. Local authorities with the biggest long-term liabilities Local authority 31 st March 2013 (,000) 31 st March 2012 (,000) Birmingham 5,963,700 5,185,800 Leeds 3,092,489 2,929,350 Glasgow 2,779,907 2,524,213 Fife 2,290,478 1,999,953 Kent 2,247,670 2,218,625 Edinburgh 2,084,090 2,000,058 Lancashire 2,032,200 1,841,800 Sheffield 1,785,502 1,482,990 Durham 1,483,169 1,369,098 Essex 1,482,753 1,428,518 Manchester 1,467,406 1,336,332 South Lanarkshire 1,461,691 1,377,388 Bradford 1,459,331 1,420,891 Norfolk 1,436,251 1,303,130 Cornwall 1,422,593 1,287, Local authorities with the biggest long-term liabilities per resident Local authority Population 31 st March 2013, per resident ( ) Eilean Siar 26,196 8,174 Blaenau Gwent 69,822 7,789 Dumfries and Galloway 148,295 6,313 Fife 369,197 6,204 South Tyneside 148,428 6,125 Shetland Islands 22,625 5,926 Gateshead 200,153 5,534 Birmingham 1,085,417 5,494 Dundee 145,453 5,303 Inverclyde 78,915 5,228 Highland 225,110 4,931 Newcastle upon Tyne 282,442 4,837 Barnsley 233,671 4,795 Islington 211,047 4,777 West Dunbartonshire 90,324 4, Tufton Street, London, SW1P 3QL (office hours) (24 hours) 9

10 5. Local authorities with biggest percentage increase in long-term liabilities Local authority 31 st March 2013 (,000) 31 st March 2012 (,000) Increase since 2012 (%) Chichester 12,850 8, Blackburn with Darwen 448, , Cookstown 9,426 7, Eden 10,279 7, Blackpool 429, , Shetland Islands 134, , Halton 194, , Derbyshire Dales 30,545 24, South Staffordshire 27,086 21, Midlothian 322, , Broadland 22,114 17, Oldham 689, , South Norfolk 34,573 27, Hambleton 24,661 20, Camden 983, , Local authorities with biggest cash increase in long-term liabilities Local authority 31 st March 2013 (,000) 31 st March 2012 (,000) Increase since 2012 ( ) Birmingham 5,963,700 5,185, ,900 Sheffield 1,785,502 1,482, ,512 Fife 2,290,478 1,999, ,525 Glasgow 2,779,907 2,524, ,694 Newcastle upon Tyne 1,366,220 1,171, ,716 Hull 1,201,564 1,008, ,247 Lancashire 2,032,200 1,841, ,400 Croydon 1,356,012 1,171, ,182 Camden 983, , ,691 Wolverhampton 1,140, , ,500 Leeds 3,092,489 2,929, ,139 Barnsley 1,120, , ,137 Liverpool 1,314,214 1,154, ,554 Lewisham 952, , ,354 Southwark 1,344,153 1,185, , Tufton Street, London, SW1P 3QL (office hours) (24 hours) 10

11 7. Highest long-term borrowing Local authority Long-term borrowing (,000) Long-term borrowing (,000) Birmingham 2,787,200 2,617,600 Glasgow 1,440,782 1,351,708 Edinburgh 1,431,317 1,408,752 Leeds 1,292,039 1,260,256 Kent 1,023,575 1,025,805 Croydon 801, ,245 South Lanarkshire 793, ,963 Dudley 719, ,504 Nottingham 701, ,713 Highland 652, ,695 Sheffield 651, ,889 Cornwall 629, ,575 Fife 601, ,378 Southwark 554, ,455 North Lanarkshire 546, , Biggest percentage increase in long-term borrowing Local authority Long-term borrowing (,000) Increase on (%) Wyre Forest 3,027 11,111 Stafford 2, Elmbridge 4, Halton* 60, Amber Valley 3, Midlothian* 197, Pendle 7, North Down 47, Peterborough 153, Eastbourne 34, Newcastle upon Tyne* 536, Blaenau Gwent* 92, Sheffield 651, Southwark 554, Camden 387, Tufton Street, London, SW1P 3QL (office hours) (24 hours) 11

12 9. Local authorities with biggest cash increase in long-term borrowing Local authority Long-term borrowing (,000) Increase on (,000) Birmingham 2,787, ,600 Newcastle upon Tyne* 536, ,194 Sheffield 651, ,111 Croydon 801, ,340 Southwark 554,955 92,500 Glasgow 1,440,782 89,074 Nottingham* 701,322 63,609 Camden 387,537 57,296 Midlothian* 197,993 54,973 Northumberland* 499,760 48,543 Peterborough 153,387 38,000 Dundee 393,261 32,283 Leeds 1,292,039 31,783 Nottinghamshire 309,040 29,200 Highland 652,179 26,484 *Councils marked with an asterisk reduced their short-term borrowing by more than half of the amount by which they increased their long-term borrowing. 55 Tufton Street, London, SW1P 3QL (office hours) (24 hours) 12

13 Sources and methodology The figures for long-term liabilities, long-term borrowing and long-term assets were all taken from the balance sheets from each local authority s statement of accounts. The figures only include liabilities and assets from council balance sheets. Figures from group balance sheets have been excluded as there was too much inconsistency in the accounts to make meaningful comparisons. Population estimates for 2012 based on the 2011 census figures were taken from: ONS 4, the General Register Officer for Scotland 5 and the Northern Ireland Statistics and Research Agency 6. The figures are available in the full data tables available through the link on page 5. Population figures for lower tier authorities have been excluded from regional totals to avoid double-counting. In some instances, local authorities reported a large increase in their long-term borrowing and a large decrease in their short term borrowing. This was possibly the result of borrowing classified as long-term in coming due in and being refinanced with further long-term borrowing. Instances where short-term borrowing decreased by more than half of the amount by which they long-term borrowing increased have been marked with an asterisk. The City of London and the Greater London Authority were excluded from the tables showing the councils with the highest long-term liabilities and long-term borrowing due to their unique natures Tufton Street, London, SW1P 3QL (office hours) (24 hours) 13

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27 December 2015 Council Tax since 1996-97 Since 2010, central government has offered grants to local authorities to freeze or cut Council Tax. Additionally, local authorities wishing to Council Tax by