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Increase in Council Debt in York

City of York Council

1:03pm 31st January 2012

The Government's Localism Bill means council housing stock will be transferred to councils from the Government.

City of York Council will need to borrow £122m to pay for this stock, meaning council debt will almost double from £133m.
Labour has raised concerns about the Government 'off-loading' national debt to local councils.

Initial indications were that York would have to borrow an additional £89m, but George Osbourne's emergency budget increased this amount to £112m following the general election. The Government has now confirmed this amount to be even higher at £122m.

Labour Cabinet Member for Health, Housing and Adult Social Services, Coun. Tracey Simpson-Laing, said:

"Conservatives and Liberal Democrats in Government have made a lot of noise about debt even though national debt has increased under this Government. The amount we have been told to borrow was first £89m, then George Osbourne increased this to £112m and we have now been told by the Government the amount will be £122m.

"What is to stop the Government increasing this amount even further to offload Government debt onto councils? Should the Government's debt get even more out of control, large amounts of this debt could be transferred onto local councils and the tab picked up by local council taxpayers".

Labour won control of City of York Council in May 2011 and inherited council debt of £133m. This had increased 89% since the Liberal Democrats took office in 2003.

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