UK council debt hit a record £154.6 billion in 2025-26 — more than double what it was in 2009-10. That £154.6 billion is sitting behind 407 councils across the UK, and ultimately behind every taxpayer in those areas. Seven councils have issued eleven Section 114 notices since 2018 — effectively declaring bankruptcy. This page shows exactly which councils owe what, who has been running them, and what the debt means per person on the ground. It also examines Reform UK's record in the councils they now control — the genuine achievements and the honest caveats.
Political Control — How to Read This Page
Every council in the tables below has a party badge showing who has been predominantly running it since 2010 (for the overall total debt figures) or who is running it now (for the current situation). The debt accumulated over many years, so current control does not always explain the debt level — some councils recently changed hands.
Top 25 Most Indebted Councils — Total Debt 2025-26
Excludes Greater London Authority bodies (TfL £14bn, GLA £4.7bn — shown separately below). Ranked by total debt. Political control reflects predominant control since 2010 / current control.
| # | Council | Nation | Party Control | Total Debt | Debt / Resident | Status / Notes |
|---|---|---|---|---|---|---|
| 1 | Birmingham City Council | England | Labour | £3.50bn | £3,200 | S114 issued 2023. Equal pay dispute £760m. Under monitoring. |
| 2 | Leeds City Council | England | Labour | £2.70bn | £3,400 | Largest Labour council. Claims debt "affordable". |
| 3 | Woking Borough Council | England | Commissioners | £2.20bn | £20,679 | S114 June 2023. £96m MRP deferred. Needs £171m govt bailout. Was Conservative. |
| 4 | City of Edinburgh Council | Scotland | Labour | £2.20bn | £4,200 | Major infrastructure programme. |
| 5 | Manchester City Council | England | Labour | £1.70bn | £3,100 | Capital regeneration programme cited. |
| 6 | Glasgow City Council | Scotland | SNP | £1.70bn | £2,750 | Large authority. Legacy equal pay costs. |
| 7 | Sheffield City Council | England | Labour | £1.60bn | £2,800 | Improving overspend position. Still "fragile". |
| 8 | Thurrock Council | England | Commissioners | £1.50bn | £8,500 | Intervention Failed commercial investments. Was Conservative. |
| 9 | Liverpool City Council | England | Labour | £1.40bn | £3,000 | Previously under government intervention (since lifted). |
| 10 | Bristol City Council | England | Labour | £1.35bn | £3,100 | Housing and transport investment debt. |
| 11 | Nottingham City Council | England | Labour | £1.30bn | £4,100 | S114 2023. Robin Hood Energy collapse. Under monitoring. |
| 12 | Spelthorne Borough Council | England | NOC | £1.00bn+ | ~£10,000 | Intervention MHCLG. Over-leveraged commercial property. Cutting debt by £360m via asset sales. |
| 13 | Newcastle City Council | England | Labour | £1.10bn | £3,700 | Capital programme largely transport and housing. |
| 14 | Coventry City Council | England | Labour | £1.05bn | £2,900 | Regeneration and transport schemes. |
| 15 | Cardiff Council | Wales | Labour | £1.00bn | £3,000 | Largest Welsh council. Capital investment. |
| 16 | Warrington Borough Council | England | Labour | £1.85bn | £7,198 | 3rd worst per capita. Commercial property investments. |
| 17 | West Dunbartonshire Council | Scotland | SNP | £0.92bn | £9,623 | 2nd worst per capita in UK. Small council, very high relative debt. |
| 18 | Slough Borough Council | England | Labour | £0.76bn | £5,100 | S114 2021. Under monitoring. Major restructuring. |
| 19 | Middlesbrough Council | England | Labour | £0.34bn | £2,400 | Previously under government commissioners (lifted 2024). |
| 20 | Croydon London Borough | England | Labour | £1.60bn | £4,400 | S114 ×3 (2020, 2021, 2022). Largest borough bankruptcy. Restructuring ongoing. |
| — | Transport for London | England | Labour | £14.0bn | — | GLA body — most indebted local body in UK. Sadiq Khan era expansion. |
| — | Greater London Authority | England | Labour | £4.70bn | — | GLA body. Andy Burnham era infrastructure debt (Khan/Burnham). |
Source: TaxPayers' Alliance / MHCLG 2025-26 data. Political control: "predominant since 2010" for accumulated debt figures. S114 = Section 114 notice (effective bankruptcy). Intervention = government commissioner intervention. Some councils dispute debt comparisons citing different responsibilities and funding arrangements.
The Worst Cases — What Actually Went Wrong
🔴 Woking Borough Council — £20,679 Per Resident Now: Commissioners
The most extreme debt per resident of any council in the UK — more than double the next worst (West Dunbartonshire at £9,623). Woking accumulated £2.2bn of debt through speculative commercial property investment designed to generate income after central government grant cuts. It issued a Section 114 notice in June 2023. The council has deferred £96 million of minimum revenue provision (the amount it must set aside to repay debt) and needs £171 million of Exceptional Financial Support from government to stay functioning. Government commissioners are now in control.
Who ran it: Predominantly Conservative until government intervention. The investment strategy was approved under Conservative control.
🔴 Birmingham City Council — £3.5bn Total Labour
The largest council bankruptcy in UK history. Section 114 issued in September 2023. Birmingham's collapse was triggered by a longstanding equal pay dispute that generated claims of up to £760 million — costs that had built up for years and were not adequately budgeted for. Total debt at £3.5 billion is almost double the council's annual revenue budget. Birmingham is the UK's second-largest city, so while £3.5bn is the highest absolute total, the per-capita figure (c.£3,200) is less extreme than Woking.
🟠 Thurrock Council — £1.5bn Now: Commissioners
Thurrock ran up £1.5bn of debt through a series of high-risk commercial investments — solar energy loans, property deals — that generated significant losses. A government-commissioned report found "serious mistakes by individuals and self-sustaining systemic weaknesses." Government commissioners were appointed and remain in control. Thurrock was Conservative-run when the investment strategy was pursued.
🟠 Nottingham City Council — £1.3bn Labour
Section 114 issued in November 2023. Nottingham set up Robin Hood Energy — a municipal energy company — which collapsed at a cost of approximately £38 million. Separately, the council over-spent its housing revenue account and failed to balance its budget. The council also faced significant equal pay costs. It is now subject to government monitoring directions.
🟠 Spelthorne Borough Council — £1bn+, ~£10,000/resident No Overall Control
Spelthorne borrowed over £1 billion — against a core spending power of just £13.5 million per year — to acquire commercial investment properties. The MHCLG Best Value Inspection in March 2025 found the financial model "not sustainable." Spelthorne is now pursuing a plan to cut debt by £360 million through asset sales, reducing the per-resident figure from ~£10,000 to ~£7,000. The investment strategy was approved under previous Conservative-majority control.
Reform UK's Council Record — The Genuine Achievements and the Honest Caveats
Reform UK took control of ten councils in the May 2025 local elections — including Kent, Derbyshire, Nottinghamshire, Leicestershire and others. Their record after approximately one year is mixed: some real achievements in debt reduction and savings, offset by broken tax promises, rising social care pressures, and questions about whether claimed savings are genuine or routine budget adjustments.
Leicestershire County Council — Debt at Lowest Recorded Level
In June 2026, Reform UK's Leicestershire administration paid off £26.9 million of high-interest debt inherited from the previous Conservative administration. Council officials confirmed this reduced the council's debt to its lowest level in recorded history — a genuine milestone that will save ongoing interest costs and free up revenue budget.
Kent County Council — £50m Loan Repaid 41 Years Early
Reform's Kent administration repaid a £50 million loan 41 years ahead of schedule in September 2025, saving £670,000 per year in interest. The council's long-term debt is projected to fall by around £80 million by the end of the 2025-26 financial year, taking total borrowing to approximately £600-650 million.
Reform's Savings Claim — £700m Across 10 Councils
Reform's head of DOGE Richard Tice claimed in March 2026 that Reform-led councils had identified £700 million in savings — £325 million in 2025-26 and £400 million budgeted for 2026-27. Independent analysis by Local Government Chronicle found £330 million in 2026-27. By council: Derbyshire £55m (6.77% of budget — largest %), Kent £49m, Nottinghamshire £7m.
How Did We Get Here? — The Three Routes to Council Debt
Route 1 — Commercial property gambling (2015-2020). When central government grants were cut after 2010, many councils borrowed cheaply (interest rates were near zero) from the Public Works Loan Board and invested in commercial property to generate income. 75% of all council debt — £116 billion — came from the PWLB. When interest rates rose, the debt became expensive. When commercial property values fell, the assets were worth less than the debt. Woking, Thurrock, Spelthorne and others collapsed this way. It was not exclusively a political failure — it was a rational response to a perverse funding incentive, pursued by Conservative and Labour councils alike.
Route 2 — Equal pay and legal costs. Birmingham's collapse was driven by equal pay claims going back decades. Similar costs have hit Glasgow, Sheffield and others. These are not discretionary — courts enforce them.
Route 3 — Social care cost explosion. SEND costs, adult social care, children's placements — all legally mandated, all rising faster than funding. Over 30 councils are at risk of Section 114 notices in the next two years according to the Local Government Association. This is the structural problem that no political party has fully solved.