Dudley Council has racked up eye-watering long-term debts of almost £750 million according to a balance sheet seen by the Dudley News.
The authority now has a new Conservative administration after Labour councillor Pete Lowe was removed as leader at last Thursday’s annual general meeting with a help from votes from Dudley’s UKIP councillors. Just days into the new Tory-led administration, figures have emerged showing the council’s long-term borrowing sits at a staggering £738 million.
Councillor Paul Brothwood, UKIP group leader on Dudley Council, said he “nearly passed out” when he saw the balance sheet and he told the News: “It’s years and years of debt.
Iain Newman, Dudley’s chief officer for finance, added: “Like most other councils we have borrowed money to invest in major assets like housing and roads.
“We manage this borrowing carefully and the interest rates that we pay compare well with other councils. One of the largest areas is housing, where five years ago we were required to borrow around £340 million to meet changes in the national housing subsidy system.
“Our borrowing also includes £160 million which we manage on behalf of the former West Midlands County and the cost of interest and repayments on this debt is spread across the whole metropolitan area.”
Cllr Clark, the Stourbridge Tory councillor who will be tasked with sorting out the cash-strapped council’s financial woes, said he was aware of the long-term debt figure as shadow finance chief while Labour was running the council and he told the News this week:
“I knew it would be an uphill task. It’s an area I will be looking at and it’s an area I’d like to decrease over my term."
He said the debt was being paid back at “very, very low interest rates” but added: “A lot of it is written into the next ten or 20 years.”
Cllr Clark continued: “It’s not the way I would run my household. We have a massive mountain to climb but we will do it.”
Conservative councillor Patrick Harley, the new leader of Dudley Council, said:
“£750million is an enormous figure. A lot of councils have similar figures but that doesn’t mean we should try and play it down.
“We have walked into this. Obviously there are other things to uncover. We have got to look at exactly what we have inherited from Labour.”
Labour councillor David Sparks, the borough’s former cabinet member for finance, said:
“In any sensible system of finance it would not be described as debt. It’s borrowing to invest, it’s expenditure on capital projects – it’s not maxing out credit cards to make ends meet.
“Unfortunately local government finances are not as simple as household accounts and therefore the figure gives an unrealistic picture. Dudley is not a heavily indebted council.”
