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NATIONAL SURVEY REVEALS COUNCILS' DEBTS

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A survey by The Independent (p8) of local government debt has revealed that councils in Britain owe nearly£50bn - ...
A survey by The Independent (p8) of local government debt has revealed that councils in Britain owe nearly£50bn - nearly enough to clear the nationl debt of India - and have interest payments amounting to£4bn a year.

The survey reveals that 10 councils owe nearly£10bn between them. The City of Glasgow Council has the greatest debt - more than£2bn, nearly twice as much as the next most indebted council, Manchester, with£1.1bn.

The results of the survey were attacked by Paul Burstow, the Liberal Democrat local government spokesman, who said: 'These figures confirm that the councils with the most debt are Labour-run. Labour's short-term decisions have long-term costs.'

He blamed Labour councils that took out large loans in the 1980s and early 1990s. 'Now the bills are coming in and services are suffering. So we have the worst of both worlds: high debt and decaying schools and housing.'

Richard Ottaway, the Conservative spokesman, said: Over the length and breadth of the country, the evidence is that Labour councils give you poor value for money. And in many cases very dubious practices are being exposed.'

But the department of the environment, transport and the regions defended councils in a statement, which said: 'All current local authority debt has arisen out of expenditure controlled by the present rules and policies of this and the previous governments. This debt does not reflect financial mismanagement.'

At least 66 (mainly district) councils have no debt, but only two county councils - Dorset and West Sussex - have no debt.

Britain's 450 local authorities own assets worth£146bn, about£2,554 per head. About half of this is in council housing, which has been reduced in value at a rate of about£2bn a year as council housing continues to be sold off. Schools and other educational assets are the next largest group, worth about£632 per head of the population.

The Independent's league tables are based on comparisons of a council's long-term borrowing with its operational assets, such as houses, buildings and land. This reveals that Edinburgh has 2.5-times as much debt as it has assets.

The worst county in Britain for debt is Lanarkshire. Once part of the monolithic Strathclyde RC, it was divided into two unitary authorities, North and South Lanarkshire, two years ago. The councils have debts of£436m each.

Camden LBC has reduced its debt by half in the past five years to£380m but its neighbour, Islington LBC, has the largest debt per head of population of£4,027.

Steve Bundred, Camden's chief executive, said it is hard for the public to make 'meaningful' judgments about the financial health of councils. 'The figures are get-at-able but hardly transparent,' he said.

The Audit Commission is conducting a consultation exercise to find suitable indicators so that council tax payers can gauge the financial health of their local authorities.

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