Aberdeen City Council is spending more than £115,000 a day paying back loan debt – a sum higher than the hefty budget shortfall it is preparing to tackle.
Councillors from across the Town House will meet for crunch talks tomorrow, working out where to wield the axe and make £41.2 million of savings.
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But the local authority’s officers have revealed that in the coming year, they will also have to fork out more than £42m in loan repayments and interest.
The figure has soared from £32.8m this year and it is expected to hit £60.5m by 2023 – the equivalent of 8% of the council’s total income.
While some of the borrowing which has led to these payments has been made by the current council administration, a large proportion is made up of historical debts from initiatives including school improvements and legacy PFI projects.
Officers have explained that the sharp rise in repayments for the coming year is a result of the £370m bond issue the council made on the London Stock Exchange in 2016, which it is now required to start giving back.
In the report, the council officer wrote: “Further increasing long-term borrowing levels places increasing pressure on the council that may be unsustainable or impact adversely on service delivery.”
SNP group leader Stephen Flynn said: “The reality is that every pound that the administration has borrowed to cover the cost of their numerous project overspends since 2012 has to be paid back – and that money comes from the exact same account as the resource for our schools, community centres and libraries.
“How can the administration seriously expect people to believe that this is all the fault of someone else when their annual debt payment has now hit £42m, a figure higher than the £41m of cuts they are proposing to make.”
He added: “The consequences of their culture of spend, spend, spend, coupled with a complete inability to manage key projects in the city, is now clear for all to see.”
Council co-leader and Conservative group leader Douglas Lumsden has hit back at the claims, saying the SNP group has been supportive of its spending plans in recent years.
And he pointed to the party’s proposal to spend almost £100m on a bridge over the River Dee in 2017.
Mr Lumsden said: “The budget difficulties we face at present are completely down to the reduction of funding from this SNP government and no amount of SNP spin can hide that fact.
“It is clear that Cllr Flynn does not understand the budget process as he brings things like bridges to the table but then complains about debt.
“£28m additional was raised from businesses in the city this year through business rates.
“This could have paid for Union Terrace Gardens and Provost Skene house in one year, instead the SNP government clawed the money back through a reduction in our revenue grant.”