Councils pay out £700m a year in interest as local authority debt hits £14bn

COUNCILS owed a combined total of more than £700 million in debt interest last year.

Scottish Government figures showed that the 32 local authorities had to pay £710.8m overall in 2010-11, up by more than £30m on the previous financial year.

The total debt owed by councils stood at just over £14 billion in 2011, up by about £1bn in a year.

As the largest authority, Glasgow owed £1.7bn last year and had to pay interest of about £83m.

The city was followed by Edinburgh with debts of £1.4bn and interest of £87m.

Conservative MSP Mary Scanlon, who obtained the figures, said debt is spiralling out of control.

She added: “The total of £9bn has now become £14bn and the interest paid on this is simply incredible.

“That is money that could be spent on services for people across Scotland, but in fact is being paid just to maintain the borrowing for those services.

“It illustrates that the efficiency savings sought by the SNP are in fact resulting in higher levels of debt, not more effective savings.”

A Scottish Government spokesman said: “In every year between 2012 and 2015, local government will receive a larger share of Scottish Government funds than in 2007-8 despite the most dramatic reduction in public spending ever imposed on Scotland by the UK government.

“Local authorities can borrow to finance capital investment but there is statutory duty that any additional borrowing must be affordable.”

The figures also show that North Lanarkshire has the third-highest debt level in Scotland of £765.8m and annual interests payments of £36.8m, with Highland close behind on £764m and interest repayments of £41.1m.

Fife is next with a debt level of £749.5m and annual interest payments of £37.1m, while Aberdeen has a debt of £736.1m and interest payments of £33.6m.

West Lothian is another council that tops the half million pound mark with debts of £517.2m and interest repayment levels of £23.7m.

The Northern Isles councils have the lowest debts in Scotland.

Orkney is carrying a debt of £34.9m and interest payments of just over £1000.

The ten councils that owed the most debt:

1. GLASGOW CITY £1,744,005

2. CITY OF EDINBURGH £1,406,839

3. SOUTH LANARKSHIRE £1,048,223

4. NORTH LANARKSHIRE £765,858

5. HIGHLAND £764,067

6. FIFE £749,518

7. ABERDEEN CITY £736,132

8. WEST LOTHIAN £517,262

9. ABERDEENSHIRE £488,105

10. DUNDEE CITY £387,410