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