Plymouth debt heads towards £1 billion

Labour finance chief “comfortable” with figures

Plymouth Labour’s finance chief says he is comfortable with the city’s level of debt as it heads towards £1 billion.

Cllr Mark Lowry (Lab, Southway), cabinet member for finance at Plymouth City Council, told the authority’s scrutiny management board on Wednesday that whilst his latest finance report for the first three months of the financial year might “set alarm bells ringing” the figures were “incredibly misleading”.

Plymouth topped the chart for the highest borrowing authority in Devon at the end of March 2025  and the amount is forecast to rise to £857 million during this financial year and to nearly £1 billion by 2028/29.

Councils are legally obliged to set an affordable borrowing limit each year which is informed by the CIPFA (The Chartered Institute of Public Finance and Accountancy) Prudential Code.

Cllr Lowry said the authority managed its borrowing activity in line with approved capital and treasury management strategies ensuring that borrowing was “managed responsibly, and sustainably” and operated well within defined parameters.

But Cllr Steve Ricketts (Ind, Drake) said his “mind boggled” every time he looked at the figures.

“How comfortable are we with that level of debt, how easy is it to balance,” he asked the finance chief. 

“I know we are not in that position, but when you see cases like Birmingham City Council going bankrupt and they start reeling off the figures, I always think what was going on at their scrutiny meetings building up to that.”

Cllr Lowry said the debt had to be balanced against the income and the investments the council borrowed money against.

He said there were grants which couldn’t go on the books as they were not allowed to and investments making millions of pounds of income.

“If you add all that in, the percentage of borrowing is much more palatable,” he said. “Personally I am comfortable with it.”

He said the council was publishing more data around the figures than it ever had before but it was still confusing to anyone who looked at it.

“If you read this it sets alarm bells ringing and yes compared to other local authorities like unitary and city councils our borrowing is higher than many but that is because we have £250 million sitting over there that we borrowed against to create an asset investment fund to create jobs, business and wealth. If I take that off the debt, which CIPFA does not let me do, I am more chilled about it.”

Scrutiny management board members heard that emerging pressures in the first three months of this financial year showed a £2.6 million variance against the approved budget.

A sum of £418,000 was due to four more children’s social care placements and £1.5 million was unexpected additional survey requirements in facility management services which involve managing and maintaining public buildings, assets and grounds.

The council is undertaking a comprehensive review of its assets after opposition councillors requested an asset register and greater control over corporate assets with more cross party decision making.

The capital programme has increased by £38.2 million to £351 million due to upgrades to the Civic Centre, the National Marine Park, additional special educational needs and disabilities (SEND) placements and housing, The majority of that increase was grant funding, councillors were told.