Wrexham has highest level of debt among north Wales councils

Dale Spridgeon, local democracy reporter

Wrexham council racked up debts of £520 million by the end of the last financial year, the highest level among the six local authorities in the north, according to an analysis of Government data.

At the end of Q4 for 2024/25, Wrexham saw a £31.2m jump from its previous year’s total debt of £489,648,000 to £520.879m.

The data from the Ministry of Housing, Communities and Local Government (MHCLG) showed this was a 6.38% increase.
The total amount of debt in Wrexham per person, using the latest mid-year population estimates from the Office of National Statistics (ONS), showed it now stood at £229.39.
A spokesperson for the council said the level of debt referenced in the figures, compiled by the BBC Shared Data Unit, was mostly due to retaining its council housing stock.

Of the total council debt at March 31, 2025 it said, around 78% related to the Housing Revenue Account (HRA).

Borrowing

Its borrowing was also “in line” with the CIPFA Prudential Code and Code of Practice on Treasury Management, and its activity was within the Council’s Borrowing Limit and Treasury Management Prudential Indicators.

“These are included in the Capital and Treasury Management Strategy which is approved annually by full Council,” the spokesperson said.

They added: “Any borrowing made is in compliance with the approved indicators within the Treasury Management Strategy, the main objective when borrowing is to strike an appropriately low risk balance between securing low interest costs and achieving cost certainty over the period for which funds are required.

“The benefits of internal/short-term borrowing will be monitored regularly against the potential for incurring additional costs by deferring borrowing into future years when long-term borrowing rates is manage cash flow to ensure a level of liquidity suitable to meet any short term financing requirements.

“Given the significant cuts to public expenditure and in particular to local government funding, the council’s borrowing strategy continues to address the key issue of affordability without compromising the longer-term stability of the debt portfolio.

Anglesey County Council reduced its debt slightly from £121.5m to £121.1m a drop of £369,000.

Next best was Cyngor Gwynedd which had reduced its figure from £202.9m to £198.3m down by £4,604,000.

Denbighshire’s debts rose from £321.4m to £327.4m up by £5,962,000.

Flintshire increased from £332.3m to £361.7m up by a hefty £29,470,000. Conwy’s debt also rose from £203.3m to £231.5m – a rise of £28,220,000.

Councils borrow funds to invest in projects such as schools, leisure centres and theatres – they can also borrow to invest in property to bring in income over and above repayments on the debt.

Spiralling debt

Experts including Jonathan Carr-West of the Local Government Information Unit (LGIU) said spiralling levels of debt by council across the UK was “extremely worrying”.

He said: “It 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.”

Anglesey Council’s 151 Officer Marc Jones said that “headline figures” did not reflect the “full picture”.

His council’s borrowing dated back “many years,” in some cases including loans originally taken out by former local authorities that existed prior to 1996. Over £10m of our current borrowing relates to these historic loans,” he said.

“Unlike some other authorities, neither Gwynedd nor Conwy have maintained their council house stock, as a result they have no borrowing relating to council housing.

“Anglesey borrowed £21.1m to buy itself out of the Housing Revenue Account subsidy scheme, also the case for Denbighshire, Flintshire, and Wrexham councils.

“The headline borrowing figures do not reflect the full picture of how councils finance their capital investment. For example, Anglesey has used around £30m of its own internal resources to fund capital expenditure.

“While this reduces immediate external borrowing, it will in time need to be replaced through external borrowing.

“The more accurate way to compare debt across authorities is through the Capital Financing Requirement (CFR), which combines both internal and external borrowing.

“While the figures may appear straightforward, they do not take into account the different historic circumstances and financial strategies of each authority. Direct comparisons can therefore be misleading.”

Borrowing decisions

A Cyngor Gwynedd spokesperson also said there were “several factors” affecting an authority’s outstanding debt, including borrowing decisions made years ago.

“The council’s current 10-year asset strategy is carefully planned and its affordability assessed in detail, and this requires a great deal of prioritisation to ensure that the Council does not borrow more than it needs and certainly not more than it can afford.

“All capital expenditure must be financed, either from external sources (government grants and other contributions), the council’s own resources (revenue, reserves and capital receipts) or debt (borrowing, leasing and Private Finance Initiative (PFI)).

“Cyngor Gwynedd has a long-term plan to repay the individual loans as they mature and sums are set aside as is required by accounting standards, legislation and when it is prudent to do so.

“Borrowing is an essential tool in managing the council’s long-term cash flow, but as outlined in the capital strategy, approved by the council in March 2025, the council has more long-term investments than debt.

“We are able to fund a significant proportion of our capital programme through internal resources or grants without having to borrow. We will only look at paying debts off early if this is financially advantageous to do so, since most long-term loans have early repayment penalties.”

A Flintshire County Council spokesperson said: “Like many councils across Wales, it had borrowed to invest in essential services and local infrastructure.

“Recent figures show our debt per-head is £2,321.98. This figure reflects our commitment to long-term investment in affordable housing, schools and community facilities for the benefit of Flintshire residents.

“Importantly, approximately 38% of this debt is ringfenced within the Housing Revenue Account (HRA), meaning it is used to fund new social housing through borrowing.

“Our borrowing decisions are guided by a robust treasury management strategy, signed off by full council and regularly reviewed to ensure financial sustainability and value for money.

“The council aims to strike a careful balance between securing low interest rates and maintaining cost certainty over the life of its investments.

“The council’s capital investment programme, also approved annually, includes key projects funded through borrowing.

“In 2024/25, this included the sustainable communities for learning schools programme and the redevelopment of Croes Atti residential care home.

“Flintshire remains committed to transparency and responsible financial planning.

“We continue to manage our finances responsibly and review our borrowing regularly to ensure it delivers value for money and supports the needs of our residents now and in the future.”

Conwy and Denbighshire councils, and Welsh Local Government Association (WLGA), were approached for comment

Sixteen of the 22 Welsh local authorities saw an increase in debt from 2023/24 to 2024/25.