North East council debt rises to £4.3bn 

Data for the seven local authorities that make up NECA show that Northumberland’s debt is largest, at £834.5m, while County Durham’s is the lowest at £434.8m.

Although the amount owned by Northumberland, Durham, South Tyneside, North Tyneside, Newcastle, Gateshead, and Sunderland has increased by around £200m in the last financial year, many councils say the lending has been to support the acquisition of assets that will provide an income in the future.

South Tyneside has the highest debt per person, at £4,947 (£738.5m total).

Meanwhile, North Tyneside has managed to have both the second lowest level of debt in the UK (£498.4m) but also the biggest increase in borrowing – rising by almost 21%.

This was partly due to borrowing £28.5m to buy its office building at Quadrant East, which should save more than £11m over the next two decades.

Not all the councils’ debt has risen – Gateshead, Newcastle, and Sunderland all saw a decease in debt levels, albeit the amount owed remains larger than that of the other councils.

North East councils debt levels at the end of 2024/25 financial year (an increase of £198.6m): 

• County Durham – £816.96 pp / £434.8m (£23.1m increase)
• Gateshead – £3,343.90 pp / £665.9m (£4.8m decrease)
• Newcastle – £2,063.64 pp / £643.8m (£35.6m decrease)
• North Tyneside – £2,353.71 pp / £498.4m (£85.9m increase)
• Northumberland – £2,551.63 pp / £834.5m (£93.7m increase)
• South Tyneside – £4,947.46 per person / £738.5m (£60m increase)
• Sunderland – £1,907.14 pp / £536m (£23.7m decrease)

Debt is not necessarily considered bad for councils, which can borrow to invest into improvements to schools, leisure centres, and other infrastructure, as well as commercial ventures that can generate an income.

Cllr Glen Sanderson, Leader of Northumberland County Council, spoke about having the largest debt in the region: “This is comparing apples and pears.

“Councils in the North East are very different in terms of size – some cover tens of miles, we cover thousands, and I make no apologies for our ambition to build the best county for our residents and visitors.

“While many councils are in dire financial straits, this authority is in a very solid position. Borrowing is entirely under control.

“In fact our recent independent review by the Local Government Association highlighted our strong financial standing – a view echoed by our external auditor.

“We want the best for Northumberland – the best leisure centres, the best schools where Government will not fund new builds, road improvements where we do not get enough central government funding, and a new rail line which has seen well over 500,000 passenger journeys in its first few months.

“Furthermore, our work with investors has paid off, especially with regards to us negotiating to secure one of the largest ever inward investments to Northumberland, worth in the region of £10bn.”

Rest of the UK

Analysis from the BBC’s Shared Data Unit shows that throughout the country, the combined debt of all councils has reached £122.2bn, an increase of £7.8bn compared to the previous financial year.

Jonathan Carr-West of the Local Government Information Unit said: “For me, the key question we need to look at is not necessarily the council’s overall level of debt, but its ability to pay back that debt and how that compares to the level of revenue those assets are bringing in.

“Where overall this has largely worked for local government, there are a few councils – and we know the famous examples like Thurrock, Woking – that have ended up with unsustainable amounts of debt.”

Birmingham has the highest level of debt, more than £3 billion, while Leeds, Manchester, and Glasgow also feature in the top 10.