Councils in Gloucestershire are among those across the West struggling with rising debts, according to new BBC analysis.
Gloucester City Council’s debt increased by £42.2m last year to £243m, while Cheltenham Borough Council’s debt rose by £3m to £204m.
Last month, the two authorities jointly sold Gloucestershire Airport for £25m. Gloucester City Council leader Jeremy Hilton said the proceeds would be used to wipe out borrowing from a £7.5m refurbishment in 2021, with remaining funds shared equally between the two councils.
Cheltenham Borough Council said most of its debt increase related to affordable housing, though it also repaid £2.6m during the same period.
By contrast, Gloucestershire County Council and Tewkesbury Borough Council managed to reduce their debt, while Stroud District Council’s figures remained unchanged.
Nationally, council debt now stands at £122bn, with hundreds of public assets – from schools to care homes – being sold off to help cover costs.
The government says it will reform the “broken” funding system and provide councils with an additional £3.4bn for local services.
Councils are allowed to borrow to invest in projects such as schools, leisure centres and theatres, or even commercial property that generates income.
But nationally, experts have raised concerns about the sharp rise in short-term lending from central government, which is sometimes being used to plug day-to-day budget gaps rather than to fund long-term investments.
Jonathan Carr-West, chief executive of the Local Government Information Unit, described spiralling levels of local authority debt as “extremely worrying”.
He said: “That 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.”
The BBC Shared Data Unit analysed the Department for Levelling Up, Housing and Communities’ borrowing and investment live tables for Q4 2024–25.
Total council debt was calculated by adding all short and long-term borrowing categories, including banks, building societies, central government and the Public Works Loan Board.
Debt-per-resident figures were based on Office for National Statistics population estimates.
This article was updated to include a response from Gloucester City Council.