Paying Off The Debt

Council's Audit Committee met this morning. Most of the discussion was in connection with Audit Scoptlands report on the Council's Finances (2010/11). You can read the report here . It covers virtually every aspect of Council activity so there was plently of scope for debate. It confirmed that the Council's debt currently stands at an eye watering £1,300,000,000 ! The bad news is that its due to increase by a further £231m once the tram borrowing requirement is secured and in the system. That will take the city's total debt to more than £1.5bn. Of course we won't get a bail out by the European Central Bank or any other such body. Edinburgh tax payers will be paying it off for decades to come, currently at the rate of atround £100m a year (that's £100,000,000 every year. That's about 10% of the Council's Revenue budget. If, as looks likely, the Council's grant from the Scottish Government continues to decline then the proportion of our budget required to service the debt will increase thereby putting more pressure on already stretched front line services. Don't mean to be unnecessarily alarmist about this but if the scenario above was played out within your own household budget you'd be pretty worried.