Barking & Dagenham Council in top 10 of high debt list

It has ranked eighth in new data from the Department of Levelling Up which shows that the council has racked up £1.03bn of debt as of the second quarter of 2023-2024. 

This averages out to around £4,735 of debt per person in the borough.

A spokesperson for the council said it needs "fair funding" from the government to reflect its level of need.

The House of Commons Public Accounts Committee has predicted that residents will experience an "extreme and long-lasting" impact on local services in the face of the high levels of local authority debt across the country.

Dame Meg Hillier, chair of the committee, said some examples of local authority debt were “staggering”. 

It comes as councils have previously been encouraged by the government to make commercial investments to generate another source of income aside from grants and council taxes.

Despite the encouragement over the past decade, council leaders have been forced to borrow more to pay for such investments as government grant funding has reduced by 40 per cent since 2010.

Barking and Dagenham Council has responded to the data from the Department of Levelling Up, which was analysed by the BBC Shared Data Unit. 

The council said: “We need funding that matches the size and needs of our population.

“Barking & Dagenham can be summed up as being ‘a bit of the north in the south and part of a fast-changing East End’. Quite simply, we need fair funding from the government that reflects our levels of need.

Barking and Dagenham Council said its population has grown sizeably in recent years (Image: Ken Mears)

“We have delivered real growth and established more efficient ways of providing services in the last few years. This includes finding £175m of savings since 2010."

They detailed their levels of "record inward investment" attracted through the development of thousands of new homes, two film studios, a new Overground station serving Barking Riverside, a university and more. 

The council also felt inflation and interest rates had stunted the growth of the borough that they describe as being "a place of strategic significance to both London and the rest of the UK" due to being a part of the Thames Corridor with a Freeport. 

They added: "Our geography places us in the ‘prosperous south’ and part of one of the richest cities in the world, London. However, our social trends tell a different story.

“We have the highest proportion of deprived households in the country and the third highest proportion of people living in council or social housing.

“Alongside this we have some of the highest levels of child poverty. Twelve thousand of our children are eligible for free school meals and 26,600 children (under 16) living in poverty after housing costs are taken into consideration.

“We need funding that reflects our circumstances, alongside meeting the challenges every other local authority faces, of rising social care costs, including rising demand from an ageing population with higher long-term needs."

The council said the borough's population has increased from 185,900 in 2011 to 218,000 in 2021, the third largest increase in England and Wales. 

They also made mention to that number including 20,000 more children than ten years ago.

The Department for Levelling Up has been contacted for a response to Barking and Dagenham Council's comments.