Friday, 1 July 2011

Birmingham City Council debt set to reach a record of £2.5bn

Debt levels at Birmingham City Council have doubled in the past seven years and will reach a record £2.5 billion by 2012, latest figures show.

The council’s borrowing stood at £1 billion in April 2004. By March this year the figure had increased by 100 per cent, largely to pay for capital projects such as the new civic library, the council house improvement programme and buying the Pallasades shopping centre for the redevelopment of New Street Station.

By 2013-14, the city will be repaying debt at the rate of almost £270 million a year – equivalent to £43 on the council tax, the finance scrutiny committee heard.

The District Auditor and councillors from across the political divide have concerns about the scale of borrowing, which places Birmingham at the top of a debt league table. No other major English city is borrowing as much per head of population as Birmingham.

Scrutiny committee member Coun Mike Leddy (Lab Brandwood) described the level of debt as “frightening”.

My comment: Don't tell me that their isn't a legal cap on the amount of debt a council can incur before someone does something about it.

Read the full story from the source Birmingham Post

Read all articles about Birmingham City Council on this blog

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