City of York Council is in £298.9 million of debt, according to Government figures.

Data by the Department for Levelling Up, Housing and Communities shows the council’s total amassed debt from 2023-24.

The figures place York the 110th highest out of 381 local authorities listed from across the UK.

But City of York Council's executive member for finance and performance, Cllr Katie Lomas, insists the authority will be able to repay the debt, adding it is "not a financial concern".

The total amassed debt per person in York over the year was £1,482 with the population given as 201,672.

“Borrowing is taken on to fund major capital schemes that deliver on our key priorities, providing facilities for residents or maintaining our assets," Cllr Lomas said.

"We only take on debt that we can afford to repay, so it’s not a financial concern. 

"However, we will be looking to reduce our capital expenditure so that we can reduce the cost of our borrowing in light of the current financial challenge.”

York Press: Cllr Katie Lomas, City of York Council's executive member for finance and performanceCllr Katie Lomas, City of York Council's executive member for finance and performance (Image: Supplied)

High levels of local authority debt will see residents face an "extreme and long-lasting" impact on local services, the Public Accounts Committee has said.

BBC analysis of the data shows UK councils owe a combined £97.8bn to lenders, equivalent to £1,455 per resident, as of September 2023.

Taking into account all types of local authorities, such as police and crime commissioners and combined authorities, the debt pile rises to £122 billion.

Dame Meg Hillier, the Public Accounts Committee's chair, said some examples of debt were “staggering”.

But council leaders say years of under-funding mean they have been forced to take out loans and invest in commercial properties just to keep services running.

Councils are 'responsible for their own finances' - Government 

A Department for Levelling Up, Housing and Communities, spokesperson said councils are “ultimately responsible for their own finances” but added “we are very clear they should not put taxpayers' money at risk by taking on excessive debt”.

“The Levelling Up and Regeneration Act provides new powers for central Government to step in when councils take excessive risk with borrowing and investment,” the spokesperson continued.

“We have also established the Office for Local Government to further improve accountability across the sector, which will help detect emerging risks and support councils to continue delivering key public services.”

Government must 'sufficiently' fund local services, says Local Government Association 

A spokesperson for the Local Government Association, which represents councils across England and Wales, said councils have faced a choice of either “accepting funding reductions and cutting services or making investments to try and protect them”.

Read next:

They said this approach was "encouraged" by the Government.

“While councils have made investment decisions to help them replace funding shortfalls, the majority of council borrowing is focused on investing in projects that contribute to their local economies or help them provide core functions, such as housing and transport schemes," the spokesperson continued. 

“When making investments, councils are required to follow strict rules and assessments to ensure they invest wisely and manage the risk of their investments appropriately. 

“The Government needs to come up with a long-term plan to sufficiently fund local services.”