New data revealed that Bury Council owe close to £300m, up by £32,837,000 from the year before (£262,429,000) in an increase of 13.4 per cent.
The council debt per person rose from £1,342.51 in 2024, to £1,510.50 per person this year.
Analysis carried out by the BBC’s Shared Data Unit found that the combined debts of all councils in the UK is now £122.2 billion, an increase of £7.8 billion in a year.
That is up seven per cent from a total of £114.5bn, the equivalent of £1,677 per resident, a year ago.
Councils can borrow funds to invest in projects such as schools, leisure centres and theatres, as well as borrow to invest in property that will bring in an income exceeding repayments on the debt.
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The recent rise is being partly driven by a near tripling of short-term lending from central government, which in some cases is being used to “paper over holes” in some council revenue budgets, rather than pay for investments and town centre improvements.
The data also shows mixed results from nearby councils.
Salford City Council’s debt has reduced by nearly £70m, down by 18.12 per cent, in the same period, while Rochdale Borough Council has seen an increase of more than £30m, up by 13.76 per cent.
Bolton Council saw a decrease of £30m (15.96 per cent) and Burnley Council saw a rise of £3,404,000 (6.07 per cent).
A total of 32 councils had no borrowing on their books.
Manchester City Council saw the third largest overall rise at 21.86 per cent (£288,585,000), with a spokesperson for the council sharing that the “current level of borrowing is affordable and sustainable”, making up less than six per cent of their annual budget.
Experts, including Jonathan Carr-West of the Local Government Information Unit (LGIU), said the spiralling levels of debt at local authorities was “extremely worrying”.
He said: “That is not a sustainable system. As one local government finance officer said to me, it’s essentially payday loans for local governments.
“I don’t think the government would say that’s it’s long-term ambition.
“They would say that is what we have had to do to paper over the cracks while we introduce a new funding system for local government.”
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A spokesperson for Bury Council said: “In common with most councils, we borrow money to bridge the difference between what we need to spend and the income we receive.
“Capital expenditure is money spent on creating or improving council assets which are used over a long period of time.
“Some examples are: our regeneration schemes in Bury and Prestwich; major housing repairs; sports, leisure, and open spaces; improving the condition of our roads; transport vehicles; and buildings such as libraries and Bury Market.
“Our borrowing is fully compliant with the rules and guidance, is prudent and in line with our cash flow needs.”
