Northumberland tops North East councils' debt table amid worries over 'unsustainable' funding system
Rising levels of debt owed by North East councils now total more than £4.3 billion.
New data shows that the amount owed to lenders by the seven local authorities in Northumberland, Tyne and Wear, and County Durham jumped by almost £200 million in the 12 months to April 2025 and is equivalent to more than £2,500 per resident on average.
Analysis carried out by the BBC’s Shared Data Unit found that the combined debts of all councils in the UK is now £122.2 billion, an increase of £7.8 billion in a year.
Experts say that debt is not inherently bad for councils and borrowing has “largely worked”, at a time when authorities are grappling with escalating demand and rising costs for social care and special educational needs and disabilities services.
However, there have long been serious worries about a financial crisis that pushed 30 councils to need emergency financial support from the Government and some town halls racking up “unsustainable” levels of borrowing.
The largest debt level overall in the North East is held by Northumberland County Council, whose total increased by £93.7 million in the 2024/25 financial year to reach £834.5 million.
Cllr Glen Sanderson, leader of Northumberland County Council, said: “This is comparing apples and pears – councils in the North East are very different in terms of size – some cover tens of miles, we cover thousands, and I make no apologies for our ambition to build the best county for our residents and visitors.
“While many councils are in dire financial straits – this authority is in a very solid position. Borrowing is entirely under control. In fact our recent independent review by the Local Government Association highlighted our strong financial standing – a view echoed by our external auditor.
“We want the best for Northumberland – the best leisure centres, the best schools where Government will not fund new builds, road improvements where we do not get enough central Government funding and a new rail line which has seen well over 500,000 passenger journeys in its first few months.
“Furthermore our work with investors has paid off, especially with regards to us negotiating to secure one of the largest ever inward investments to Northumberland worth in the region of £10bn.
“Our finances are run on a very tight rein – but where we can invest for a better Northumberland we do, and we will continue to do so. We inherited a significant level of borrowing which is actually reducing despite our very ambitious delivery of major projects across the county.”
Jonathan Carr-West, of the Local Government Information Unit (LGIU), said that councils needing emergency support, via Treasury loans or being allowed to sell assets to cover day-to-day spending, to stay afloat was “not a sustainable system” and amounts to “essentially payday loans for local government”.
He added: “For me, the key question we need to look at is not necessarily the council’s overall level of debt, but its ability to pay back that debt and how that compares to the level of revenue those assets are bringing in.”