Nine councils across Scotland are spending more than half of their tax income on servicing historic debts, according to the Scottish Greens.
A report published by the party shows long-term debt being held by Scotland's 32 local authorities totals £11.5 billion.
On average, 42% of the money raised through council tax is paid back to the UK Treasury or banks as loan repayments, the analysis found.
This ranges from just 17% in Orkney to 103% in the Western Isles, with a total of nine local authorities, including Glasgow and Edinburgh, spending 50% or more of tax income servicing debt.
For most councils, the debt consists of loans from the Public Works Loans Board (PWLB), an executive agency of the Treasury, and long-term loans provided by banks.
In 2015-16 Scottish councils spent almost £1 billion on repayments to the PWLB and still owe the board a total of almost £9 billion, the report said.
It also found Scotland has the highest proportion of PFI/PPP debt per person in the world.
The Greens are calling for the debts to be written off to allow local authorities to direct funds to public services.
Finance spokesman Patrick Harvie said: "Given the crisis facing local authority finances, it's unacceptable that councils are using council-tax revenue to deal with historic debts that enrich private banks and the UK Treasury.
"The unethical nature of the loans from private banks justifies cancellation of these payments and the Westminster government should write off council debts to end the unfair squeeze on local services.
"We must also improve oversight so that our local authorities aren't forced into such high-risk financing in future.
"A Scottish Government-controlled loans board would offer greater stability and value, and I would encourage Scottish ministers to explore the idea."
A spokesman for council body Cosla said: "Councils are extremely responsible with regard to borrowing money and they work to a code in managing their borrowing.
"Loans are taken out to fund vital infrastructure which is integral to the services which are provided to support communities.
"Councils operate within strict guidelines through well-established Treasury management policies and they apply the Prudential Code on affordability, to ensure that debt is not a burden on the council or its communities.
"Nonetheless, we are all very aware that councils are facing extremely difficult financial circumstances, with the prospect of another difficult financial settlement, and anything that can be done by the UK Government, as part of the Autumn Statement, to help alleviate these pressures and free up resources to protect services to our communities would be welcome."
A spokesman for the Treasury said: "Historic debt is the responsibility of individual local authorities. The government has no plans to change this position.
"Responsibility for borrowing decisions lies with the locally-elected members of the council, who are democratically accountable to their electorates."
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereLast Updated:
Report this comment Cancel