Cash-strapped Wigan Council managed to cut its debts by £12m in a year
Wigan Council cut its debt by £12m in just one year, latest figures reveal.
That means long-term borrowing currently stands at £349.6m - one of the bigger amounts in the country but the authority’s accountants say they have got it covered.
It need also be taken into account that the town hall has been forced to cut tens of millions of pounds from its budgets due to a decade of Government-enforced austerity measures.
The Chartered Institute of Public Finance and Accountancy says delivery of public services could be put at risk by unsustainable borrowing, after debt among UK local authorities rose to more than £100bn.
Funding for councils fell by almost half between 2010-11 and 2017-18, according to the National Audit Office.
“With government funding in decline, it is unsurprising councils are having to adapt and find alternatives,” said Don Peebles, head of policy at the Chartered Institute.
“While councils are borrowing for a wide range of purposes, such as building houses and investing in major infrastructure, one trend which has been concerning is the growth in investment in commercial property - which exposes public finances to new risks.”
The government’s Public Works Loan Board was the main lender to Wigan Council as of December, followed by publicly-owned bodies.
The loan board offers low-interest loans to councils, without requiring them to prove they can afford the repayments.
There is no limit to the amount councils can borrow from it.
Paul McKevitt, deputy chief executive, said: “Our long term debt reduced last year by £12m. One of the reasons we have debt is because we retain our own housing stock and had to take out a loan when the rules around housing funding changed in 2014. The council’s net assets as per our draft accounts are £348m so we can adequately cover any debt.”