50% rise in City of York Council's debt charges sparks row

Published in News York Press: Photograph of the Author by , Chief reporter

A FORMER York council leader claims the authority’s debt charges have soared by more than 50 per cent in the past two years.

Liberal Democrat Steve Galloway said the Labour-run council is now paying an average of about £650,000 a month in interest on borrowed money.

He said this compares with £418,000 when his party was in charge before the 2011 elections, at which he lost his seat. But a senior Labour councillor has hit back, claiming the figures were not a like-for-like comparison, and blaming the Liberal Democrats for the rise.

Mr Galloway said interest rates during the period had been stable and therefore could not account for the rise, and he suggested the increase was a result of a “borrow and spend” policy by the Labour administration.

“The policy has echoes of the last Labour government which increased the country’s debt dramatically, a policy which was partly responsible for the subsequent economic crash,” he said.

“In York, a £20 million ‘Economic Infrastructure Fund’ has been set up. It is being used for a variety of projects but recently announced plans to purchase an arts barge and use borrowing to fund a ‘living wage’ have come in for particular criticism.”

He said that in total, the council would have to find more than £10 million during the next financial year to service its debts.

He said: “That is likely to be at the expense of further cuts to public service standards.”

Coun Julie Gunnell, cabinet member for corporate services, claimed Mr Galloway’s comments failed to reflect the fact that most of the interest payments currently made by the authority related to schemes agreed by the previous Liberal Democrat administration.

“It is those decisions that have led to increased interest payments for which we are now responsible and which we are successfully managing,” she said.

Comments (25)

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10:11am Mon 14 Jan 13

capt spaulding says...

You have to hand it to our Labour lot, they are very good at spin and blame.
You have to hand it to our Labour lot, they are very good at spin and blame. capt spaulding
  • Score: 0

10:28am Mon 14 Jan 13

atorycouncil2014 says...

"most of the interest payments currently made by the authority related to schemes agreed by the previous Liberal Democrat administration."

Holy s***. if this is true we are seriously in the mire as the last lot didn't really borrow much. If these figures don't include the £20 million Calamity James has borrowed for his 'get me a safe seat' campaign then we can probably be looking at a further 50-100% rise in debt repayments over the next 12 months.

Anyone want to take a book on when York files for bankruptcy?

And where Calamity James will be surveying the wreckage from?

And how many pictures of Red Sonja will accompany the story?
"most of the interest payments currently made by the authority related to schemes agreed by the previous Liberal Democrat administration." Holy s***. if this is true we are seriously in the mire as the last lot didn't really borrow much. If these figures don't include the £20 million Calamity James has borrowed for his 'get me a safe seat' campaign then we can probably be looking at a further 50-100% rise in debt repayments over the next 12 months. Anyone want to take a book on when York files for bankruptcy? And where Calamity James will be surveying the wreckage from? And how many pictures of Red Sonja will accompany the story? atorycouncil2014
  • Score: 0

11:01am Mon 14 Jan 13

Oaklands Resident says...

The LibDems should take responsibility for Council expenditure up to May 2011. After that it’s down to Labour (mis) management.

They have admitted in the Press that they are borrowing £20 million more and that around £13 million of that is now committed (and attracting interest charges).

Its one thing the Council borrowing to invest if they know that their current account expenditure will be reduced. That was the argument used in favour of consolidating their activities into one office building.

But does anyone seriously believe that setting up an old barge as an arts centre is going to reduce the tax burden or even provide meaningful long term jobs?

Just freeze new expenditure, give taxpayers a break and concentrate on keeping core public services going.
The LibDems should take responsibility for Council expenditure up to May 2011. After that it’s down to Labour (mis) management. They have admitted in the Press that they are borrowing £20 million more and that around £13 million of that is now committed (and attracting interest charges). Its one thing the Council borrowing to invest if they know that their current account expenditure will be reduced. That was the argument used in favour of consolidating their activities into one office building. But does anyone seriously believe that setting up an old barge as an arts centre is going to reduce the tax burden or even provide meaningful long term jobs? Just freeze new expenditure, give taxpayers a break and concentrate on keeping core public services going. Oaklands Resident
  • Score: 0

11:17am Mon 14 Jan 13

capt spaulding says...

atorycouncil2014 wrote:
"most of the interest payments currently made by the authority related to schemes agreed by the previous Liberal Democrat administration."

Holy s***. if this is true we are seriously in the mire as the last lot didn't really borrow much. If these figures don't include the £20 million Calamity James has borrowed for his 'get me a safe seat' campaign then we can probably be looking at a further 50-100% rise in debt repayments over the next 12 months.

Anyone want to take a book on when York files for bankruptcy?

And where Calamity James will be surveying the wreckage from?

And how many pictures of Red Sonja will accompany the story?
I will have a shilling on the side on that one
[quote][p][bold]atorycouncil2014[/bold] wrote: "most of the interest payments currently made by the authority related to schemes agreed by the previous Liberal Democrat administration." Holy s***. if this is true we are seriously in the mire as the last lot didn't really borrow much. If these figures don't include the £20 million Calamity James has borrowed for his 'get me a safe seat' campaign then we can probably be looking at a further 50-100% rise in debt repayments over the next 12 months. Anyone want to take a book on when York files for bankruptcy? And where Calamity James will be surveying the wreckage from? And how many pictures of Red Sonja will accompany the story?[/p][/quote]I will have a shilling on the side on that one capt spaulding
  • Score: 0

11:38am Mon 14 Jan 13

goodfellow says...

CYC looks a good authority from Selby then agan any local authoroty looks good from selby , apart from the Mayor of Doncaster !
CYC looks a good authority from Selby then agan any local authoroty looks good from selby , apart from the Mayor of Doncaster ! goodfellow
  • Score: 0

12:21pm Mon 14 Jan 13

Jackanory2 says...

Boring, point scoring.
Boring, point scoring. Jackanory2
  • Score: 0

1:09pm Mon 14 Jan 13

Lunatic says...

Take into account the prior LibDem mismanagement, and the cuts to funding the ConDems are forcing on the council, and I'm not surprised.

Naturally, they'll pin all the blame on Labour.
Take into account the prior LibDem mismanagement, and the cuts to funding the ConDems are forcing on the council, and I'm not surprised. Naturally, they'll pin all the blame on Labour. Lunatic
  • Score: 0

1:13pm Mon 14 Jan 13

south bronx red 2 says...

After years of Liberals feathering their own nests, they have a cheek to point a finger.
Im glad the likes of Galloway have as much influence as any comment on these pages.
After years of Liberals feathering their own nests, they have a cheek to point a finger. Im glad the likes of Galloway have as much influence as any comment on these pages. south bronx red 2
  • Score: 0

1:45pm Mon 14 Jan 13

atorycouncil2014 says...

Lunatic wrote:
Take into account the prior LibDem mismanagement, and the cuts to funding the ConDems are forcing on the council, and I'm not surprised.

Naturally, they'll pin all the blame on Labour.
sorry who is it thats borrowed £13 million this year alone, and promised to borrow £20 million in their first term
[quote][p][bold]Lunatic[/bold] wrote: Take into account the prior LibDem mismanagement, and the cuts to funding the ConDems are forcing on the council, and I'm not surprised. Naturally, they'll pin all the blame on Labour.[/p][/quote]sorry who is it thats borrowed £13 million this year alone, and promised to borrow £20 million in their first term atorycouncil2014
  • Score: 0

2:07pm Mon 14 Jan 13

meme says...

It does not matter who is responsible the figures are dreadful
The question is how do we pay it all back?
Someone must take control and sort out what we really need to spend money on and what we dont!
Barges/people employed to encourafge old people to walk more/cycling officers/£1.5 million on new furniture for the new offices/even a 'living', not minimum wage, in these times of austerity may be desirable but not a necessity. We can only pay with money we have.... not borrow more. Everyone must act responsibly and it appears our present Coucil are not
It does not matter who is responsible the figures are dreadful The question is how do we pay it all back? Someone must take control and sort out what we really need to spend money on and what we dont! Barges/people employed to encourafge old people to walk more/cycling officers/£1.5 million on new furniture for the new offices/even a 'living', not minimum wage, in these times of austerity may be desirable but not a necessity. We can only pay with money we have.... not borrow more. Everyone must act responsibly and it appears our present Coucil are not meme
  • Score: 0

2:47pm Mon 14 Jan 13

TheTruthHurts says...

Thats nearly 8 Million pounds a year in INTEREST ALONE.
'
Wow.... just Wow
Thats nearly 8 Million pounds a year in INTEREST ALONE. ' Wow.... just Wow TheTruthHurts
  • Score: 0

3:04pm Mon 14 Jan 13

Kevin Turvey says...

‘meme says... 2:07pm Mon 14 Jan 13
It does not matter who is responsible the figures are dreadful
The question is how do we pay it all back?
Someone must take control and sort out what we really need to spend money on and what we dont!
Barges/people employed to encourafge old people to walk more/cycling officers/£1.5 million on new furniture for the new offices/even a 'living', not minimum wage, in these times of austerity may be desirable but not a necessity. We can only pay with money we have.... not borrow more. Everyone must act responsibly and it appears our present Coucil are not’


Exactly!

There is no way to dress this up so here goes!

These idiots that are voted in by us are absolutely useless!

They have no care about when or who will pay back the debt just that it will not be them!

It is well past time to get these self-serving imbeciles out of power.

It is really simple, no fancy tricks/techniques; even thicko councillors should be able to understand this:

Spend less than what you earn, just so the councillors/highly paid local government employees understand (that would be - take as council tax), then you have no debt! You may then be able to save some for when times are really bad!

Do not get loans from anybody!

Especially from the governmental equivalent of Wonga.com

If the leader of the council cannot balance his own finances then how is he going to be able to do the same or lead for a council?

These councillors/highly paid local government employees are responsible for deliberate financial mismanagement and should pay the ultimate price for that responsibility and failure, not rewarded!

It is values/behaviors like these that have led (what I really mean is deceived) this country into massive debt and living beyond its means.

James Alexander should resign or be sacked forthwith.
‘meme says... 2:07pm Mon 14 Jan 13 It does not matter who is responsible the figures are dreadful The question is how do we pay it all back? Someone must take control and sort out what we really need to spend money on and what we dont! Barges/people employed to encourafge old people to walk more/cycling officers/£1.5 million on new furniture for the new offices/even a 'living', not minimum wage, in these times of austerity may be desirable but not a necessity. We can only pay with money we have.... not borrow more. Everyone must act responsibly and it appears our present Coucil are not’ Exactly! There is no way to dress this up so here goes! These idiots that are voted in by us are absolutely useless! They have no care about when or who will pay back the debt just that it will not be them! It is well past time to get these self-serving imbeciles out of power. It is really simple, no fancy tricks/techniques; even thicko councillors should be able to understand this: Spend less than what you earn, just so the councillors/highly paid local government employees understand (that would be - take as council tax), then you have no debt! You may then be able to save some for when times are really bad! Do not get loans from anybody! Especially from the governmental equivalent of Wonga.com If the leader of the council cannot balance his own finances then how is he going to be able to do the same or lead for a council? These councillors/highly paid local government employees are responsible for deliberate financial mismanagement and should pay the ultimate price for that responsibility and failure, not rewarded! It is values/behaviors like these that have led (what I really mean is deceived) this country into massive debt and living beyond its means. James Alexander should resign or be sacked forthwith. Kevin Turvey
  • Score: 0

3:13pm Mon 14 Jan 13

Eric Olthwaite says...

This is all about respect!

It seems that the so called powers at be have no respect for the electorate as they extend our debt run up by their actions/omissions without asking or indeed caring!

Time for them all to go now from all sides and replaced with non-idiots that are not just riding the gravy train.

No sweeteners/payoffs or other forms of money, just go!
This is all about respect! It seems that the so called powers at be have no respect for the electorate as they extend our debt run up by their actions/omissions without asking or indeed caring! Time for them all to go now from all sides and replaced with non-idiots that are not just riding the gravy train. No sweeteners/payoffs or other forms of money, just go! Eric Olthwaite
  • Score: 0

4:19pm Mon 14 Jan 13

Guy Fawkes says...

These idiots that are voted in by us are absolutely useless!

They have no care about when or who will pay back the debt just that it will not be them!


And therein lies the problem. The people whose library/swimming pool/meals on wheels service is potentially on the block are precisely the people (i.e. the small minority of the overall electorate) who will turn out and vote at council elections. Those whose main concern is keeping council tax and public debt down tend not to bother.

Added to which, Labour's core message is that any reduction in public spending whatsoever, however strong the case for it, comes under the heading of evil, heartless Tory cuts and cannot even be considered.

And, as others have pointed out, councillors (and other elected representatives) have no personal incentive to balance the books. Personally I'd like to see a system whereby for every 1% of national (or in the case of a councillor, regional or local) debt an elected representative presides over the increase in, their salary is cut by a corresponding 1%.

But the unaccountable taxing, borrowing and spending will only ever change if people who believe fundamentally in small government, low taxation and living within our means bother to turn out and vote.
[quote]These idiots that are voted in by us are absolutely useless! They have no care about when or who will pay back the debt just that it will not be them![/quote] And therein lies the problem. The people whose library/swimming pool/meals on wheels service is potentially on the block are precisely the people (i.e. the small minority of the overall electorate) who will turn out and vote at council elections. Those whose main concern is keeping council tax and public debt down tend not to bother. Added to which, Labour's core message is that any reduction in public spending whatsoever, however strong the case for it, comes under the heading of evil, heartless Tory cuts and cannot even be considered. And, as others have pointed out, councillors (and other elected representatives) have no personal incentive to balance the books. Personally I'd like to see a system whereby for every 1% of national (or in the case of a councillor, regional or local) debt an elected representative presides over the increase in, their salary is cut by a corresponding 1%. But the unaccountable taxing, borrowing and spending will only ever change if people who believe fundamentally in small government, low taxation and living within our means bother to turn out and vote. Guy Fawkes
  • Score: 0

4:23pm Mon 14 Jan 13

capt spaulding says...

Eric Olthwaite wrote:
This is all about respect!

It seems that the so called powers at be have no respect for the electorate as they extend our debt run up by their actions/omissions without asking or indeed caring!

Time for them all to go now from all sides and replaced with non-idiots that are not just riding the gravy train.

No sweeteners/payoffs or other forms of money, just go!
No mention of bicycles or the spear and jackson no 4 shovel. Well done.
[quote][p][bold]Eric Olthwaite[/bold] wrote: This is all about respect! It seems that the so called powers at be have no respect for the electorate as they extend our debt run up by their actions/omissions without asking or indeed caring! Time for them all to go now from all sides and replaced with non-idiots that are not just riding the gravy train. No sweeteners/payoffs or other forms of money, just go![/p][/quote]No mention of bicycles or the spear and jackson no 4 shovel. Well done. capt spaulding
  • Score: 0

4:34pm Mon 14 Jan 13

Ex CYC says...

The debt must be affordable since it doesn't prevent Cllr James travelling first class on trains as he did on the 8.20 to London this morning
The debt must be affordable since it doesn't prevent Cllr James travelling first class on trains as he did on the 8.20 to London this morning Ex CYC
  • Score: 0

5:12pm Mon 14 Jan 13

R'Marcus says...

Big Steve blames everyone for the council's woes. He blamed the Tories and the Labourites when he was the LibDum leader.
It is his way. Blame, blame,blame everyone but not him.
Big Steve blames everyone for the council's woes. He blamed the Tories and the Labourites when he was the LibDum leader. It is his way. Blame, blame,blame everyone but not him. R'Marcus
  • Score: 0

6:47pm Mon 14 Jan 13

Back and Beyond says...

If the debt is £650,000 per month how much is the debt ? and how much of the increase comes from the new Council Headquarters?
If the debt is £650,000 per month how much is the debt ? and how much of the increase comes from the new Council Headquarters? Back and Beyond
  • Score: 0

6:50pm Mon 14 Jan 13

betty swollox says...

How I see it is that there are 2 main problems with our councillors.
1. apart from one they are all governed by the party they represent, the average person is not their priority, keeping whatever party they support happy is.
2. How many have experience of running a business?, which running the council and its budget is.Playing professional politics isnt want the people of York want
How I see it is that there are 2 main problems with our councillors. 1. apart from one they are all governed by the party they represent, the average person is not their priority, keeping whatever party they support happy is. 2. How many have experience of running a business?, which running the council and its budget is.Playing professional politics isnt want the people of York want betty swollox
  • Score: 0

7:05pm Mon 14 Jan 13

nearlyman says...

Thank **** they are not now running the country.............
...This is socialism, have whatever you want someone else will pay.
Thank **** they are not now running the country............. ...This is socialism, have whatever you want someone else will pay. nearlyman
  • Score: 0

7:07pm Mon 14 Jan 13

nearlyman says...

Does this mean that approximately 2600 council tax payers in York are effectively paying in to only service the debt repayments?
Does this mean that approximately 2600 council tax payers in York are effectively paying in to only service the debt repayments? nearlyman
  • Score: 0

7:10pm Mon 14 Jan 13

nearlyman says...

That must be two Wards worth getting absolutely nothing for their money.......unbeliev
able !
That must be two Wards worth getting absolutely nothing for their money.......unbeliev able ! nearlyman
  • Score: 0

8:15pm Mon 14 Jan 13

Buzz Light-year says...

R'Marcus wrote:
Big Steve blames everyone for the council's woes. He blamed the Tories and the Labourites when he was the LibDum leader. It is his way. Blame, blame,blame everyone but not him.
He blamed the people of York for the idiotic bus lane on Fulford Road at Iceland and Aldi.

He said we weren't clever or proficient enough for it.

I don't care what else the arrogant so and so has to say on anything.
No respect.
[quote][p][bold]R'Marcus[/bold] wrote: Big Steve blames everyone for the council's woes. He blamed the Tories and the Labourites when he was the LibDum leader. It is his way. Blame, blame,blame everyone but not him.[/p][/quote]He blamed the people of York for the idiotic bus lane on Fulford Road at Iceland and Aldi. He said we weren't clever or proficient enough for it. I don't care what else the arrogant so and so has to say on anything. No respect. Buzz Light-year
  • Score: 0

8:19pm Mon 14 Jan 13

Buzz Light-year says...

south bronx red 2 wrote:
After years of Liberals feathering their own nests, they have a cheek to point a finger. Im glad the likes of Galloway have as much influence as any comment on these pages.
If only that were true.

Not just libdems but anyone with even half an axe to grind with JA will jump on Mr G's bandwagon if they think it will help with their agenda.
[quote][p][bold]south bronx red 2[/bold] wrote: After years of Liberals feathering their own nests, they have a cheek to point a finger. Im glad the likes of Galloway have as much influence as any comment on these pages.[/p][/quote]If only that were true. Not just libdems but anyone with even half an axe to grind with JA will jump on Mr G's bandwagon if they think it will help with their agenda. Buzz Light-year
  • Score: 0

9:34am Tue 15 Jan 13

meme says...

I believe th debt is actually £200,000,000
Thats £200 million!!
Although some 50% of that is core debt. The rest bought back the housing stock, I assume from Government.
Its a helluva figure whichever way its looked at
I believe th debt is actually £200,000,000 Thats £200 million!! Although some 50% of that is core debt. The rest bought back the housing stock, I assume from Government. Its a helluva figure whichever way its looked at meme
  • Score: 0

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