Westmorland and Furness Council replaced the former Eden District Council, South Lakeland Council, Barrow Borough Council and Cumbria County Council across the three districts on the 1st of April 2023 has a almost £200 million pounds of debts.
High levels of local authority debt will see residents face an "extreme and long-lasting" impact on local services, the Public Accounts Committee has said.
The BBC’s Shared Data Unit analysis of data by the Department for Levelling Up shows UK councils owe a combined £97.8bn to lenders, equivalent to £1,141 per resident, as of September 2023. This increases further when taking into account all types of local authorities, such as police and crime commissioners and combined authorities, the debt pile rises to £122bn.
Westmorland and Furness Council’s total current debts £192.279,000.00 that represents an £853 pound debt per person living in the Westmorland and Furness Council district.
Westmorland and Furness Council claims that the debts are not its debts but those of the former councils it replaced on the 1st of April with the debts passing to the new authority.
Many of the new council’s leadership and staff were part of the former district and county councils that collectively created the almost £200million pounds of debt the new council will need to repay.
Westmorland and Furness Council claims it has not borrowed and further money however the council is consulting on its second budget and planned council tax increase of 4.99% and facing a shortfall of millions in its budget plans.
In 2020, chair of the Public Accounts Committee Dame Meg Hillier said the Government was “blind to the extreme risks” of council borrowing levels.
Since then, six more councils have had to issue section 114 notices declaring themselves effectively bankrupt: Croydon, Slough, Thurrock, Birmingham, Woking and Nottingham.
In the case of Croydon, Slough, Thurrock, Woking and Nottingham - those effective bankruptcies could be directly linked to failed investments and spiralling debts. Thurrock’s £469m funding black hole, for example, was caused by a series of failed investments in solar farms.
Westmorland and Furness Council has recently approved multi million pound plans to build its own 2MW solar farm at Sandscale Park, Barrow on land currently used to graze sheep. It has also emerged the council is planning to building more solar farms including on just outside Penrith were plans to screen a solar farm have been submitted quoting the council plans for a solar farm on council owned farm land alongside the A66 near Stainton.
A spokesperson for the Department for Levelling Up, Housing and Communities said:
“Councils are ultimately responsible for their own finances, but we are very clear they should not put taxpayers' money at risk by taking on excessive debt.
“The Levelling Up and Regeneration Act provides new powers for central government to step in when councils take excessive risk with borrowing and investment. We have also established the Office for Local Government to further improve accountability across the sector, which will help detect emerging risks and support councils to continue delivering key public services.”
The government department has also said its making available a funding package for councils worth over £64 billion for the year ahead – an above inflation increase of 6.5%.
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