NO new long-term borrowing was undertaken by Barnsley Council in the last financial year but the local authority’s overall level of debt now stands at more than £800m.
According to a report into finances, the capital financing requirement (CFR) represents the total amount of capital spending that has not yet been paid for.
The figure stands at £827m, which includes £572.8m in loans.
A report said: “As borrowing costs remained elevated, it has not been considered prudent to undertake additional borrowing during 2025/26.
“The recommended approach has been to hold off further long-term borrowing and closely monitor the profile of capital spend and funding requirements over the planning period.
“Temporary reserves and balances have been utilised in lieu of external borrowing until a time when rates begin to fall from their current high levels.
“Total loans outstanding £572.8m does not represent the council’s level of debt.
“The CFR, which stands at £827m, is how much the council really owes overall.
‘The difference between the two is due to timing issues where money may have already been spent on assets increasing the CFR but cash reserves have been used temporarily instead of taking out external loans.
“An example would be buying a house for £200,000, taking out a mortgage for £150,000 and using £50,000 of savings temporarily.
“The mortgage is £150,000, but the true financing need (CFR) is still £200,000.”
Local authorities’ external debts which refers to the amount councils owe through either short-term or long-term loans is capped at just over £1bn through the Local Government Act.
Croydon, Birmingham and Woking have already effectively declared bankruptcy by issuing Section 114 notices but leaders in Barnsley previously said the council’s not at risk.
Finance bosses previously admitted the council holds higher-than-normal levels of debt compared to its neighbours, chiefly due to the town centre investment in the Glass Works regeneration scheme.
However, the report does reveal that the council will need to borrow more cash up to 2027/28.
It added: “The council’s underlying need to borrow for capital purposes is £63m over the period to 2027/28.
“This is an updated position, based on the latest capital spend projections and the temporary use of available reserves.
“Treasury officers will continue to effectively manage the council’s risk exposure and monitor borrowing options.
“The borrowing strategy is being continually reviewed to avoid incurring higher costs in the future when the authority may not be able to avoid new borrowing to finance capital expenditure or the refinancing of maturing debt.”
Effectively, the sum leaves every single resident in the borough with a hypothetical £2,775 bill on their shoulders.
But Coun Martin Bancroft, cabinet spokesperson for core services, told the Chronicle: “Barnsley, like all councils, can only borrow for long-term assets that benefit residents for decades, such as schools, roads and regeneration projects.
“This includes the Glass Works town centre regeneration and the nine secondary plus two specialist schools built between 2010 and 2013 under the Building Schools for the Future programme.
“Recent reports quoting £572m refer only to our actual external loans.
“The full and true figure is our capital financing requirement of £827m which is the total underlying borrowing approved by the council.( “All borrowing must meet strict affordability rules.
“This debt is backed by valuable long-life assets that continue to deliver benefits to Barnsley communities.”
John O’Connell, chief executive of the Taxpayers’ Alliance, warned of the ‘ticking time bomb’ nature of local authority debt.
“Taxpayers will ultimately be left holding the bag.
“Decades of speculative investments, reckless borrowing and statutory obligations from Westminster have left councils stuffed to the brim with debt, while basic services like fixing potholes have been neglected.
“Local authorities need to urgently get a grip on their debts before even more end up going completely bust.”
