York Council debt set to increase to £300 million over next 5 years.

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The York Councils debt is set to increase to over £300 million by 2018.

That’s the equivalent of £2,530 for every taxpayer in the City.

The amount owed by the Council, net of investments, currently stands at £204 million.

Even that figure is double the debt inherited from the previous LibDem administration in May 2011.

Council debtIronically, when in opposition, Labour said that the Council had too much debt.

Their actions in tripling the burden will take some explaining at the next Council elections in 2015.

The Authority is vulnerable to increases in interest rates although much of the borrowing is long term.

This year the extra expenditure means that £27 is added to this years Council Tax bill in repayment costs with a further £14 expected next year.

The figures are due to be discussed at a Council “Cabinet” meeting later today.

Labour add £1 million to York’s annual debt repayment levels in just 24 months

The Council has admitted that increased borrowing means that Council taxpayers are now paying £1m a year more in debt charges than in 2011.

Kings Square work

Kings Square work

Most has been used to bolster what the Council describes as its Economic Development Fund.

£18 million has been committed to this fund already which is being used to pay for projects such as:

• Refurbishment of Kings Square

• Acquisition of an “Arts Barge”

• Tour de France start

• Newgate market refurbishment

• New City centre bus stops

Of the annual additional payments around £0.5 million goes on interest charges while £0.5 makes staged repayments of the principal.

It will take over 20 years to fully repay the borrowing

£16 million owed to York Council

The Council has published a list of the outstanding amounts owed to it in each of the last 3 years.
Uncollected debts
The size of the debt shows an upward trend which could lead to cash flow problems if not reversed.

Although many of the debts will eventually be recovered, some will not.

There have been significant increases in the amounts owed on business rates, former tenant arrears and sundry debts.

In total the amounts owed have increased from £12 million to £16 million over a 3 year period.