The scale of debt faced by councils across the UK has been laid bare in a new report – and it adds up to more than a million in Herts alone.
Herts County Council faced by a £1,385,685 mountain of long-term liabilities in the 2012 to 2013 financial year – an increase from £1,251,502 the previous year.
Liabilities cover pensions and other costs that do not have to be paid immediately, but will have to come out of an organisation’s budget at a later date.
The Taxpayers Alliance – which issued the report, published today – says this will ‘saddle future generations with today’s debt burden’.
Of the 319 councils listed in the report, 105 increased their long-term borrowing on the year before – including Herts County Council.
The authority’s long-term borrowing was listed as £260,557 in the 2012 to 2013 financial year – although this was only £32 higher than the previous year.
Dacorum Borough Council, meanwhile, had £425,744 in long-term liabilities in the 2012 to 2013 financial year – up on £415,093 the previous year.
Its long-term borrowing cost was listed as £346,739 in the 2012 to 2013 financial year – exactly the same amount as the previous year.
The county council’s long-term assets were worth £2,742,787 in 2012 to 2013, compared to £2,744,135 the previous year.
The cost of its long-term liabilities was equal to 51 per cent of the value of its assets, while for the borough council the figure was 56 per cent.
Taxpayers Alliance spokesman Andy Silvester said: “Both councils are relatively healthy on their asset:liability ratio.”
The borough council’s long-term assets were worth £754,457 in 2012 to 2013 compared to £747,248 the previous year.
The report showed that 62 local authorities had long-term liabilities greater than or equal to long-term assets, which could make it difficult to fund pension costs in the future.
Derrick Ashley, the county council’s cabinet member for resources, said: “While the Taxpayers’ Alliance commentates from the sidelines, Hertfordshire County Council is actually having to deal with the challenges faced by the public sector.
“Unlike central government, councils can’t borrow money to meet their day-to-day running costs. Instead our borrowing is used to meet the cost of long-term investments in infrastructure such as highways, care homes and schools.
“Our prudent financial management has allowed us to freeze council tax since 2009, while continuing to invest in services that are essential to supporting Hertfordshire’s residents and economy.
“This is despite the difficult economic situation, national reductions in public sector spending and increasing pressures on our budget from inflation, as well as the cost of meeting the many needs of Hertfordshire’s growing population.”