Taxpayers across Britain face 'ticking time bomb' as council debt soars to record level

'Labour have their heads in the sand' over the sheer scale of the spending, the Shadow Housing Secretary told GB News

'Labour have their heads in the sand' over the sheer scale of the spending, the Shadow Housing Secretary told GB News

Local authority debt across the UK has reached £156.4billion within the last year, new research has revealed.

The staggering figure represents a £6billion or 4.1 per cent increase on the previous year, the TaxPayers' Alliance has confirmed.

The net debt of the public sector has now reached over £2.9trillion, which is now 93.7 per cent of GDP.

Of the £154billion, 75 per cent of the debt was loaned from the Public Works Loan Board.

The loans were often used to purchase commercial property, but that practice was banned in 2020, so that loans could not be offered for acquiring property purely for financial gain.

England accounted for 80 per cent of the local authority debt, totalling £127billion.

Since 2009, local authority debt within the UK has more than doubled, rising by 121 per cent, or £84.6billion.

The debt in England now is the equivalent of more than 53 million council tax band D bills on average.

Per resident, the debt now sits at £2232, which is double the same figure in 2009-10.

Woking holds the unfortunate title of the council that has the highest debt per resident, sitting at £20,679.

Shadow Housing Secretary Sir James Cleverly, told GB News: "Labour promised to strengthen local government, but the reverse has happened.

“Their top-down reorganisation plans are causing chaos. West Surrey, for example, will have to spend 40 per cent of its income on debt. And with Andy Burnham promising more devolution, Labour Mayors could be hiking taxes even more to plug the gap.

“Labour have their heads in the sand. The Conservatives are the only party with a plan to get spending under control, cut debt and deliver a stronger economy and stronger country.”

Local authority debt within England and Wales in 2025-26 was more than seven times the estimated cost it would take to fill all potholes on local roads in England and Wales, which would cost authorities an estimated £18.6billion.

London's boroughs held £20.1billion of the 2025-26 debt, which is the highest of any local authority.

Transport for London held the most debt of any local authority body within the UK, with £14billion in debt.

The Greater London Authority held the second-most debt with £4.7billion.

The data has been published by the TaxPayers’ Alliance ahead of the Local Government Association Annual Conference in Bournemouth.

John O’Connell, the group's chief executive, said: “The mountain of local authority debt is a ticking time bomb for taxpayers who will ultimately be left holding the bag.

“Decades of speculative investments, reckless borrowing and statutory obligations from Westminster have left councils stuffed to the brim with debt, while basic services like fixing potholes have been neglected.

“Local authorities need to urgently get a grip on their debts before even more end up going completely bust.”

Outside of Greater London, Birmingham City Council comes in as the most indebted authority, with £3.5bn, which is almost double its 2026-27 net revenue budget.