Unite’s Drop the Debt campaign looks at how local authorities are choosing to repay historical debts, often at extortionate rates, rather than protecting public services and jobs.
The financial crisis engulfing the City of Edinburgh Council is the result of political choices. The decision to wield the axe in the direction of staff and services is also a political choice. There is another way…
Facts about CEC debt
The City of Edinburgh Council has nearly £1.7 billion pounds of debt.Almost all of this is either owed to private banks or to HM Treasury. Private banks the Council owes include Goldmach Sachs and the Royal Bank of Scotland (RBS), both of whom received government bailouts.
This £1.7m debt was racked up for ‘capital spending.’ The Capital Budget is used for things such as building new schools and care homes and buying new fleet vehicles.
Every year the Council pays back over £77 million in interest alone. These payments come from the Revenue Budget. This is the budget that pays for our jobs and services.
The Council is seeking to cut £107 million from the revenue budget over three years. Over this three years it will pay £230 million in interest alone to the Treasury from this very budget.
Prioritising paying interest on debt rather than protecting jobs and services is a political choice.
Drop pre-devolution debt
Unite calls for an amnesty on the interest payments of Scottish local authority pre-devo debt to the UK Treasury.
Scottish Councils hold nearly £2.5 billion in pre-devolution debt liabilities with the Public Works Loans Board (PWLB), an arm of the UK Treasury.
The average interest rate is
- 8% for pre-devolution debt
- 4% for post-devolution debt held with the PWLB.
Scotland-wide pre-devolution council debt in 2016
- Over £3 billion paid in interest only since 1998
- £2.5 billion needed to settle principle sums
- Almost £200 million in interest alone for pre-devo debt paid by councils in 2016/17.
CEC pre-devolution debt in 2016
- £373,259,769.10 liabilities
- Up to £96 million in interest-only over next 3 years
- Local government finance and the state of the debt full research paper (PDF) by Unite CEC Branch with the support, advice and guidance of Unite Scotland Research
- Drop the Debt A5 leaflet
- Drop the Debt A4 booklet
Help with Drop the Debt
Help us now by spreading the word on social media using the hashtag #dropthedebt, starting conversations at work and in the community and writing to your MP and MSP.
We need everyone to stand with us as we tell the politicians – who have been elected to represent all of us – in the City Chambers, in Holyrood and at Westminster that prioritising paying interest on debt rather than protecting jobs and services is a political choice that is damaging the public sector and the services it provides.
You’ll get what you’re owed but you’re not going to get a quarter of a billion pounds in interest over the next three years. We need that quarter of a billion pounds to look after our city and take care of the people who call Edinburgh home.