Greenwich Council’s debt soars by more than £900 per resident

Greenwich Council borrowed more than £900 for every resident of the borough in the last financial year – the second biggest per-head debt increase in the country.

The borough’s debt went up by 57 per cent in a year, a BBC investigation into council finances across the UK found. Details of the investigation have been shared with The Greenwich Wire.

While Greenwich is a long way from having the largest council debt in the country, the sheer scale of its borrowing in the last year makes it stand out when compared with other authorities.

At the end of March, Greenwich had a total amassed debt of £732.3 million – up from £467 million the previous year. Taken as a whole, it is the fourth biggest rise in borrowing of any council in the UK, beaten only by Surrey County Council, Newham and the City of Manchester. 

But taken by head of population, Labour-run Greenwich increased its debts by £912.55 per person – a sum only exceeded by Conservative-controlled Kensington & Chelsea in west London, with £1,095.21 per person. 

Of this new debt, 60 per cent was to pay for new council housing through the Greenwich Builds programme. 

In total, Greenwich now owes £2,490 for every adult and child in the borough. Some 74 per cent of this total debt is for new council housing.

Greenwich also carries far bigger debts than its three neighbours in southeast London.

In Tory Bexley, total debt rose by £7.2 million to £230.6 million – taking it to £919 per resident in total. In Labour-run Lewisham, total debt actually decreased by £5.2 million to £179.8 million, or £602 per person. Bromley is the only council in London with no debt at all, according to the government data that was analysed by the BBC.

Councils across the UK are struggling after 15 years of funding squeezes and soaring bills for social care and temporary housing. Since 2020, six councils have declared themselves effectively bankrupt – mostly after coming unstuck with investments – while 30 have sought financial support. 

The Labour government has proposed reforming the system by which councils get cash from Whitehall – although that has led to fears that some London councils will lose out. 

In Greenwich, the borough’s poorest residents have lost their exemption from council tax, while the council plans to sell car parks and its Olympic flagship equestrian centre in Shooters Hill to raise cash. 

It has also been forced to scrap plans to close Maryon Wilson Animal Park after opposition from residents, while it reduced the scope of plans for controlled parking zones which were aimed at raising £1 million a year for its transport budget.

But its spending has also come under scrutiny: in March it was revealed that Greenwich had spent £1 million refurbishing little-used changing rooms in Charlton Park. 

While the majority of the debt is for new council housing, it will a concern that new homes account for a smaller proportion of the new borrowing. In February the council announced it was scaling back the number of homes it built itself in favour of entering into deals with developers, saying this would offer better value for money.

A council spokesperson told The Greenwich Wire: “We are a well-managed council, but we are dealing with the impact of years of previous government underfunding, coupled with the impact of the [Liz Truss] mini-budget and an ageing population, alongside growing demand for our services. 

“Housing is a priority for Londoners and we’re pulling every lever available to build, and buy, the vital homes that we need. We want residents to have safe and secure homes and adding to our housing stock helps us avoid using costly hotels. We reduced the use of hotels, with no families having to spend a night in one by July this year.

“Like many councils, we have had to borrow to keep investing in homes and services that local people rely on. Most of our borrowing is linked to housing  – 74 per cent –  needed to build new council homes. All borrowing for new housing in the last year came from the government’s Public Works Loans Board, which offers councils competitive rates.” 

Asked why Greenwich had far higher debts than its neighbours, the spokesperson said: “Every council is different, and each makes choices based on local needs. In Greenwich, our borrowing reflects the priority we place on housing and protecting services for residents.”

The biggest council debt in the country belongs to the UK’s biggest council: Birmingham has a debt of £3.3 billion. London’s biggest council debts are held by  Barking & Dagenham and Croydon, with about £1.5 billion each. 

Greenwich’s chief executive, Debbie Warren, is one of a group of government commissioners who have effectively taken over Croydon, which effectively went bankrupt after the failure of a venture into property development.

Woking council in Surrey owes £20,600 per resident after a disastrous series of property investments. 

• Greenwich’s debt and the equestrian centre featured on BBC1’s Breakfast programme on Monday morning (watch from 7.23am).

Thanks to the BBC Shared Data Unit for their assistance with this story.

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