Local authority debt in the UK reached a record £154.6 billion in 2025-26, an increase of £6 billion, or 4.1 per cent, on the previous year, new TaxPayers’ Alliance research has revealed.

Published ahead of the Local Government Association (LGA) Annual Conference and Exhibition in Bournemouth, the TPA has found that council debt has more than doubled since 2009-10. In cash terms, local authority debt has risen by £84.6 billion, from £70 billion to £154.6 billion.

In England, local authority debt totalled £127 billion in 2025-26, equivalent to more than 53 million average band D council tax bills. Across England and Wales, council debt was more than seven times the estimated £18.6 billion cost of repairing all potholes on local roads.

The ten most indebted local authorities held a combined £35.8 billion of debt, nearly a quarter of the UK total. Transport for London was the most indebted local authority body, with £14 billion of debt, while Birmingham was the most indebted council outside Greater London Authority bodies, with £3.5 billion.

As council leaders and senior officials gather at the Bournemouth International Centre for the LGA, the TaxPayers’ Alliance is warning that rising borrowing, speculative investments and growing statutory costs have created a ticking time bomb for local taxpayers.

John O’Connell, chief executive of the TaxPayers’ Alliance said:

“The mountain of local authority debt is a ticking time bomb for taxpayers who will ultimately be left holding the bag.

“Decades of speculative investments, reckless borrowing and statutory obligations from Westminster have left councils stuffed to the brim with debt, while basic services like fixing potholes have been neglected.

“Local authorities need to urgently get a grip on their debts before even more end up going completely bust.”