Home   Kent   News   Article

The Kent councils with the biggest debts and what the money has been spent on

New figures reveal which Kent councils have the highest level of debt – and those who aren’t a single penny in the red.

Canterbury City Council (CCC) is bearing the biggest burden, at £157 million, followed by Ashford Borough Council (ABC), at £124 million.

Whitefriars shopping centre in Canterbury, which the city council bought for £154 million
Whitefriars shopping centre in Canterbury, which the city council bought for £154 million

Both of these local authorities have invested heavily in major regeneration projects – such as Whitefriars and the Riverside development in Canterbury, and Elwick Place in Ashford.

Meanwhile, Swale, Tonbridge & Malling and Tunbridge Wells councils have zero debt, according to government figures analysed by the BBC Shared Data Unit.

The research also takes an area’s population into account – showing CCC has a debt equivalent to £1,007 per person, while the figure for ABC is £935.

Although these are the highest levels in Kent, they pale in comparison to some of the “staggering” numbers seen elsewhere in the UK.

Woking has a debt of almost £2bn, which works out at £18,756 per person, following a risky investment spree involving hotels and skyscrapers.

Table showing the debt levels of each Kent council
Table showing the debt levels of each Kent council

MPs on the Public Accounts Committee have warned high levels of council debt will see residents face an “extreme and long-lasting” impact on local services.

Since 2010, local authorities have seen government grant funding reduce by 40% in real terms. In turn, they have been encouraged to make commercial investments to provide an alternative source of income.

Local authorities across the UK have bought hundreds of commercial assets – from shopping centres to office parks, cinemas, energy companies and housing developments.

This includes in Kent, where CCC has spent more than £250 million on regeneration projects. This includes £154 million on purchasing the Whitefriars shopping centre and £115 million on the Riverside leisure complex - which includes a Curzon cinema, restaurants and student accommodation.

The city council’s cabinet member for finance, Cllr Mike Sole, told KentOnline: "Our comparatively high level of borrowing and annual borrowing costs relate to our purchase of the Whitefriars shopping centre in the heart of the city which was for strategic regeneration purposes.

Ashford Borough Council spent £75 million on regenerating Elwick Place in Ashford
Ashford Borough Council spent £75 million on regenerating Elwick Place in Ashford

"The current administration is focused on repaying the debt down, and concentrating any future borrowing on increasing the provision of council homes rather than shopping centres.

"We are moving our council offices into unused/hard-to-let parts of the centre, making better use of underused buildings, bringing more workers into the city centre and freeing up our current office site for much-needed housing development."

Meanwhile, ABC has spent £75 million on its own regeneration project, Elwick Place, which has replaced the town’s old market site. It is now home to a Picturehouse cinema, Travelodge hotel, Matches sports bar and a gym. It also bought the run-down Mecca Bingo hall in Lower High Street for £1.8 million in 2018.

But a council spokesperson said £110 million of its debt relates to its Housing Revenue Account (HRA) and was a debt transfer from government in 2013 to take ownership of the social housing stock the council runs.

“It should be noted that the HRA debt is funded by the residents of the HRA and therefore not the taxpayer,” they added.

Canterbury City Council’s £115 million Riverside Leisure Complex includes a Curzon cinema
Canterbury City Council’s £115 million Riverside Leisure Complex includes a Curzon cinema

“The remaining £13,500,000 of PWLB debt relates to the general fund which would incorporate the debt linked to general council assets and include examples such as Elwick Place, Kent Wool Growers, International House and the Stour Centre.”

Gravesham, at £84 million, has the third-highest total debt in Kent, followed by Dover (£69 million), Folkestone & Hythe (£67 million), Dartford (£32 million), Thanet (£19 million), Sevenoaks (£12 million) and Maidstone (£5 million).

Kent County Council has a total debt of £787 million, equivalent to £499 per person.

No data is available for Medway.

Across the country, council leaders have had to borrow increasing amounts to pay for their investments. This has mainly been through an arm of the Treasury known as the Public Works Loan Board.

Ashford Borough Council bought the Mecca Bingo hall in Lower High Street for £1.8m in 2018
Ashford Borough Council bought the Mecca Bingo hall in Lower High Street for £1.8m in 2018

In recent years, various commentators have warned that the debts held by councils – which must balance their budgets every year - are unsustainable.

In 2020, the chair of the Public Accounts Committee, Dame Meg Hillier MP, said the government was “blind to the extreme risks” of council borrowing levels.

Since then, six more councils have had to issue section 114 notices declaring themselves effectively bankrupt: Croydon, Slough, Thurrock, Birmingham, Woking and Nottingham.

In the case of Croydon, Slough, Thurrock, Woking and Nottingham - those effective bankruptcies could be directly linked to failed investments and spiralling debts. Thurrock’s £469m funding black hole, for example, was caused by a series of failed investments in solar farms.

A 2023 report by credit agency Moody’s warned that “weak government” and the falling value of commercial properties due to the pandemic meant more councils were likely to go bust.

Dame Meg Hillier MP, chair of the Public Accounts Committee. Picture: PA
Dame Meg Hillier MP, chair of the Public Accounts Committee. Picture: PA

Yet, despite the risks, a report by the Local Government Information Unit (LGiU) in March also found 52% of councils planned to increase borrowing to plug gaps in town hall funds.

Dame Meg said: “Some of the outlier examples of high local authority debt are staggering, and the impact on services for residents is liable to be extreme and long-lasting.”

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. This was an approach that 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.

“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.”

A Department for Levelling Up spokesperson said councils “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,” they added.

“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.”

A spokesperson for the District Councils’ Network said the figures are misleading because they include Housing Revenue Account debt, which “distorts the metrics and means they do not compare like-with-like”.

Close This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies.Learn More