Derby City Council confirms debt will rise to £450m

Council House plans The authority is spending £34m refurbishing its headquarters

Related Stories

Derby City Council has said its debts can be paid off, despite admitting its borrowing would reach £450m within two years.

The authority is to build a £38m velodrome, £20m swimming pool and is spending more than £34m refurbishing its headquarters.

Bosses said current borrowing is at £330m, but they expect to borrow another £120m over the next two years.

The council said it would not allow borrowing beyond its means.

The council's strategic director for resources, Roger Kershaw, said: "We have, statutorily, to follow a prudential code which means the borrowing we incur has to be affordable."

Bankrupt authorities

He said that while £450m may seem large, the authority has assets of £1.1bn.

"If you liken it to a household account, that's not a bad mortgage to house value ratio," Mr Kershaw added.

A number of U.S. and European local authorities have declared themselves bankrupt after incurring debts of a similar size.

San Bernardino, in California, filed for bankruptcy protection last week while Stockton, also in California, filed for bankruptcy in June.

A number of Spanish authorities are also in financial difficulty after borrowing more than they could afford.

More on This Story

Related Stories

BBC Derby



8 °C 6 °C


Try our new site and tell us what you think. Learn more
Take me there

Copyright © 2015 BBC. The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.