Revealed: How much Shropshire councils have borrowed in the past year
Both Shropshire Council and Telford & Wrekin Council borrowed more money during the past year.
Figures obtained by the BBC Shared Data Unit show that, in Shropshire, £410,205 was borrowed up to the end of quarter four in 2024/25 – an increase of 35.24% compared to the previous year.
Meanwhile, Telford & Wrekin Council borrowed £434,903 in 24/25 – up from £371,321, or 17.12%.
Analysis of data from the Ministry of Housing, Communities and Local Government (MHCLG) shows UK councils owe a combined £122.2 billion to lenders, an increase of 7%.
Councils can borrow funds to invest in projects such as schools, leisure centres and theatres – they can also borrow to invest in property that will bring in an income over and above repayments on the debt.
But the recent rise is being partly driven by a near tripling of short-term lending from central government, which in some cases is being used to paper over holes in some council revenue budgets rather than pay for investments and town centre improvements.
Experts including Jonathan Carr-West of the Local Government Information Unit (LGIU) said the spiralling levels of debt at local authorities was “extremely worrying”.
He said: “That is not a sustainable system. As one local government finance officer said to me, it’s essentially payday loans for local governments.
“I don’t think the government would say that’s it’s long-term ambition. They would say that is what we have had to do to paper over the cracks while we introduce a new funding system for local government.”
Shropshire Council is set to borrow £26.9m from the Government in 2025/26 – one of 30 authorities that has sought exceptional financial support.
The councils will be allowed to use Treasury loans or cash from selling assets to cover day-to-day spending, which they are normally banned from doing.
A Shropshire Council spokesperson said: “Shropshire Council sometimes needs to borrow money, usually to pay for and invest in things like new buildings or roads. This is something that most other councils do to ensure that places can continue to grow and develop as they should.
“Councillors meet on a regular basis at Full Council meetings to set very clear limits on what can be borrowed and invested, to and from where and how this should happen to ensure that we use the money you pay via your council tax wisely.
“The majority of the money we borrow for these purposes is from the Public Works Loan Board (PWLB) which is essentially a government-backed lender for public authorities.
“For the past few years, we haven’t borrowed as much money as we could have because we had extra cash saved up. This meant that we could pay for things and pay back old loans without having to get new ones right away.
“Because of this, the amount of money we owed was lower than usual, thanks to having extra cash. Over the years we have been able to save some of this money, and we have used it to provide additional money to run services.
“However, due to the financial challenges we face we don’t have the extra cash that we once did. This means that we need to borrow money if we are to progress important infrastructure projects.
“Every year we set aside some money in our budget to make sure we can pay back what we borrow.
“Last year we started a Transformation Programme, which involved spending money on projects to help us save money in the future.
“These investments in transformation are allowed, by government, to be paid for with money from selling things we own (like buildings) or borrowing.
“We asked the Government if we could borrow £26.8m in 2024/25 for these projects, and the Government has approved this request.
“This means that we will have to pay back the borrowed money, but the savings from the new projects are bigger than the costs, so we’re confident that it remains a good deal for everyone.”
Meanwhile, Councillor Zona Hannington, Cabiner member for finance, governance and customer services, at Telford & Wrekin Council, said the authority undertakes “prudent borrowing” to fund capital investment which generates assets for the council, such as our Nuplace housing developments.
“Telford & Wrekin Council has a strong track record of sound financial management,” said Cllr Hannington.
“The total value of assets held by the council at March 31, 2025, excluding infrastructure assets such as roads and bridges, was £663.4m. This asset figure is some £228.5m greater than the value of the outstanding debt.
“By investing in projects such as Nuplace and the property investment portfolio, we generate revenue returns to the council which can then be used to fund essential front-line services for our residents.
“Over the current budget period running for the next four years, we are forecasting a net return of £43m through our Growth Fund investments in our property investment portfolio, whilst we will receive around £7m return through Nuplace.
“The income stream from such projects has proven invaluable in helping Telford & Wrekin Council weather the storm of global economic crisis twinned with more than a decade of radical central government cuts to local authorities and the huge increase in demand and cost of delivering children’s services and adult social care.
“Through considered, smart investment, Telford & Wrekin Council has not only been able to maintain the high-quality services that won us the title of Council of the Year 2025, but we have also managed to maintain the lowest rate of council tax in the Midlands for our residents.”
