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Hold Your Council Accountable: Forget Tax Hikes: Plan B Is Citizens' Debt Audits

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Before raising taxes, local councils should look seriously at auditing their astonishing debt repayments.

Like that most cherished of British institutions, the NHS, local government in the UK is on borrowed time. The local government patient is lying motionless on its death bed, with George Osborne poised to turn off life support switch.

Nowhere is the crisis in UK local government more apparent than in Scotland, where Moray Council recently hit the headlines for threatening to raise deeply regressive council tax levels by a whopping 18%.

In reality, the gap between what Osborne has cut from Town Hall funding and what can realistically be made up from local taxation looks increasingly stark, so we are told hikes to income taxes are also now required.

Total grant allocation to Scottish local government in 2016-17 will be £10,152.3m. A substantial reduction on the 2015-16 grant of £10,756.7m – more than a 7% reduction in real terms.


More at link.

But look at those numbers... and only 'servicing' debt.

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I always wondered why Councils have debt - which they sell to banks or whoever and get charged interest for the money.

But you can't as a Council Tax paying idiot easily buy "Council Bonds".

I'd consider investing in my local council - since the rate of interest that are paying is attractive to banks - it would be attractive to me too.

And if that table is correct - the cost of debt is £888 million a year for Scottish councils.

(paid for out of central taxation and council tax).

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From the comments:

You leave out a few salient points:

1. The figures in this article all relate to Scottish local authorities. The law regarding local authority borrowing differs between England and Scotland. You can't draw implications for UK local authorities from this data.

2. In Scotland, council tax income only makes up an average of about 20% of local authority income. Therefore to spend 42% of council tax income on debt repayments is to spend about 8% of total income. A fair amount, but hardly apocalyptic.

3. You don't compare the current interest levels to the interest levels that could reasonably be expected under the best deal possible. That would give us some idea of how much money could *realistically* be saved if interest rates were not being 'rigged', as you put it (it would, genuinely, have been interesting to see some evidence for that claim rather than a load of rhetoric). Without that, all we are left with is shock and horror at some large numbers, without any sense of what they mean.

I am sure that you also know that there are actually no 'options on the table' at all for local authorities in this, in the sense that none of them can unilaterally change the terms on which they are offered loans.

I'm also left wondering what you think is so bad about local government debt that it ought to be forgiven. Should everyone else's debt be forgiven too, just because the banks are unpopular?

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That is truly shocking especially 103% of income on servicing debt for no 7 on the list ie more than their income :wub:

What the hell is going on if local councils do this? I am a citizen with no debt and I deeply object to paying debts for councils (or government either) when I have no choice in the matter. If I can live within my means then LAs should be able to as well.

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Tried sometime ago to read how the council finances are calculated. I think that the government provides them funds in some way and their debts are not on the government books?

The main issue here is that SNP has not got the balls to reform tax. They dont seem to want to change the way property/land is taxed. The freeze/extra council bands is just so stupid. They should go for LVT and scrap council tax.

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