Taxpayers set to shoulder £43billion worth of council debt under Labour's devolution plans
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Taxpayers are set to bear the burden of £43billion worth of council debt under Labour's plans to create 'super-councils' via their local authority reform. In the biggest overhaul of local government in more than 50 years, ministers want to scrap hundreds of small local authorities as part of Angela Rayner's 'devolution revolution'.
![[Ministers want to scrap hundreds of small local authorities as part of Angela Rayner 's 'devolution revolution']](https://i.dailymail.co.uk/1s/2024/12/20/20/93367199-14215203-image-a-18_1734728209832.jpg)
But many of these smaller councils are deeply in debt and a senior government source has suggested this financial baggage would be taken on by the new larger councils, rather than being transferred to central Government. Across England's 21 county councils and 160 district councils there is believed to be £24 billion of debt held.
![[Cash-strapped Thurrock Council in Essex borrowed £655million of public money to invest in Liam Kavanagh's (pictured) solar farm business]](https://i.dailymail.co.uk/1s/2024/12/20/20/73821827-14215203-Cash_strapped_Thurrock_Council_in_Essex_borrowed_655million_of_p-a-21_1734728316499.jpg)
And another £19 billion worth of debt can also be found in the smaller councils set to be included in the mergers. The management of council debt is an issue that is yet to be resolved, as the Treasury is likely to disagree with Ms Rayner on how the money should be distributed.
![[Thurrock hoped the huge investment in 53 solar farms (one pictured in Swindon) would generate millions in extra income]](https://i.dailymail.co.uk/1s/2024/12/20/20/73823241-14215203-Thurrock_hoped_the_huge_investment_in_53_solar_farms_one_picture-a-22_1734728324476.jpg)
Another Whitehall source told The Times that most debt would end up 'staying local'. But in cases of 'serious local failure related to debt', ministers would have to step in and pass it on to taxpayers nationally to pay off. Thurrock Council was left with more than £1billion worth of debt after investing in a solar farm tycoon who used taxpayer cash to buy luxury goods including a yacht and a private jet (file image).
![[Unveiling the plans yesterday the Deputy Prime Minister Ms Rayner said England will go from one of the 'most centralised' nations to one where local leaders 'with skin in the game' have significant powers.]](https://i.dailymail.co.uk/1s/2024/12/20/20/93226051-14215203-Unveiling_the_plans_yesterday_the_Deputy_Prime_Minister_Ms_Rayne-a-19_1734728289962.jpg)
Ministers want to scrap hundreds of small local authorities as part of Angela Rayner 's 'devolution revolution'. An example of such a case can be found in Essex with Thurrock Council, which was left with more than £1billion worth of debt after investing in a solar farm tycoon who used taxpayer cash to buy luxury goods including a yacht and a private jet.
![[The Deputy PM (pictured in Leeds) said the Government wants to 'fill the map with devolution']](https://i.dailymail.co.uk/1s/2024/12/20/20/93212131-14215203-The_Deputy_PM_pictured_in_Leeds_said_the_Government_wants_to_fil-a-20_1734728291750.jpg)
