Cardiff Council’s debt to soar by 70% over the next three years
Alex Seabrook, local democracy reporter
Cardiff’s public debt is set to jump by about 70 per cent during the next three years to more than £1.4 billion.
Cardiff council has currently borrowed about £841 million, and this is forecast to increase to £1.435 billion by the financial year 2023–24.
The staggering increase has prompted questions about how sustainable high levels of borrowing are, with the council already paying about £34 million each year in interest.
Council leader Huw Thomas said the borrowing was needed to build thousands of new council homes, as well as new schools and an indoor arena at Cardiff Bay.
The borrowing figures were revealed in the council’s treasury management annual report, which was discussed during a full council meeting on Thursday, October 21.
Liberal Democrat Councillor Rodney Berman said: “How sustainable is it that we’re letting our borrowing creep up to that level in the coming years. We’re already paying £34 million in interest charges, what are we going to be paying in interest charges when we get to the point in a few years time where our borrowing is not far off doubling?
“I really worry about where we’re going to go as a city, and the affordability of the strategy that this Labour administration is overseeing. Are they mortgaging us up to the hilt? Are we actually going to be able to sustain services in the city in the coming years, at this level of borrowing?”
Cllr Thomas said Labour was investing in the city’s economy, children and housing, and criticised the calls for less borrowing as a hark back to the austerity years of the Liberal Democrat and Conservative coalition government.
He said: “Clearly if we borrow money, then we have to pay it back. But there are echoes of the coalition government, this idea that has been disproved over the last 10 years of austerity, that you can somehow cut your way out of a crisis. No, you invest your way out of a crisis.
“When you look at the projected borrowing for the coming five years, approximately £250 million of that borrowing is through the housing revenue account. That’s this council borrowing money to build good quality houses that are much needed in the public sector rental market in Cardiff.
“On the general fund, there is borrowing largely to build new high schools and primary schools across the city, and to build an indoor arena backed by a contract with the operator to pay that borrowing back, which will deliver roughly £100 million of inward investment into the city per year.
“That is the investment that Labour is bringing into the city, investment into our children, our economy and our housing. That’s what we now need as we come out of the pandemic, to invest in our future and grow ourselves out of this crisis.”
Council bosses previously said they were working on a “huge and historic” house-building programme of 4,000 homes, to tackle the city’s housing crisis, with 600 already built since 2019. Several new schools are being built across Cardiff, with more planned. Last month council’s cabinet also signed off the business case for the new indoor arena at the Bay.