Lancashire Tories rubbish Farage 'bankruptcy' claim amid council's £100k-a-day debt interest row

Alan Vincent said the borrowed money was being used to fund key projects and assets that benefit residents – and insisted County Hall’s finances were sound.

The Reform UK leader made the allegation during a campaign visit to West Lancashire on Wednesday, ahead of next month’s local elections. He said that it was costing the county council £135,000 a day in interest to service its borrowing needs.

The Local Democracy Reporting Service (LDRS) has since established the actual figure is around £100,000, but Mr. Farage’s broader point was that the ruling Conservative group had got the authority it has controlled for the last eight years into what he described as “the most awful mess”.

In an interview with the LDRS, he said residents were paying the price for a county council that was “hugely in debt [and] frankly on the verge of bankruptcy”.

However, County Cllr Vincent – who is also the cabinet member for resources – has hit back at that characterisation and justified how much debt the authority holds. Budget papers reveal that during 2025/26, it will need financing to the tune of £1.2bn.

County Cllr Vincent told the LDRS: “Our debt equates to less than £1,000 per head of our population – a figure much less than many much smaller authorities than ours across the North and Midlands.

“It builds essential schools, adds SEND [special educational needs and disabilities] units to benefit our most vulnerable children and buys a fleet of buses to take our kids to school.

“It builds and acquires care homes in Lancashire for children unfortunate enough to need them and… it does all of that whilst, at the same time, frequently actually cuts our costs – thus saving money.

“Mr. Farage seems to think Lancashire County Council empties bins and is on the brink of bankruptcy – neither of these things are remotely true.

“The public need to think carefully about whether the lack of even a basic knowledge of how local government works makes Reform a party they could put in charge of their hard-earned cash,” he added.

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Lancashire County Council’s borrowing covers what is known as ‘capital’ spending on infrastructure, as opposed to the cost of day-to-day services, which are paid for by a combination of council tax, government grants and other sources of income. It plans to spend £299m on capital projects this year and £169m the next.

At its budget meeting in February, the authority acknowledged it will need to save £103m within the next two years – £51m of which is cost-cutting planned for, but not delivered, during 2024/25.

It is also facing demand pressures of £42m and inflationary costs of £33m in the 12 months ahead.

The county council will need to use £1.5m from its reserves to bridge a financial gap in the current year, but expects to to set a balanced budget for 2026/27. Its transitional reserve pot – currently standing at £125m – has been deemed sufficient to enable the authority to continue to operate as “a going concern”.

A spokesman for the authority said: “It is incorrect to say that Lancashire County Council is on the brink of bankruptcy.

“In February the council set its annual budget which demonstrated that the council can fund all the services that it plans to deliver, with additional reserves of £250m available.

“The council also has assets of £3.5bn, including a wide range of land and buildings such as schools, waste processing sites, libraries, care homes, highways and other local infrastructure.

“The council has over many years borrowed at competitive rates to own and maintain these as we don’t generally receive funding for that.

“Like a domestic mortgage, the council evaluates whether it can afford to borrow to own and use these assets.

“Currently the council pays interest of around £100k a day for this borrowing, which enables us to continue to have these priority resources available to our communities.”

The authority said earlier this year it was attempting to “minimise” its new borrowing – expected to total £693m during 2025/26 – until interest rates had stabilised.