Stevenage's council housing stock has been given as the main reason for the £235m total debt owed by Stevenage Borough Council.
The total amount of debt owed by each of the UK's local authorities was revealed by the BBC earlier this week, with Stevenage's council owing an equivalent of £2,631 per resident.
In North Hertfordshire, meanwhile, the council owes lenders £357,000, equivalent to £3 per resident.
Across the UK, councils owe a combined £97.8bn to lenders, equivalent to £1,455 per resident, as of September 2023.
This is often because they have been encouraged to make commercial investments to provide an alternative source of income at a time when government grant funding has been slashed by 40 per cent in real terms since 2010. In some cases, it has directly contributed to councils effectively declaring themselves bankrupt.
However, Stevenage council is unusual in still maintaining a large housing stock, and the overwhelming majority of its debt is linked to that stock.
All income and expenditure relating to council homes is recorded in the council's Housing Revenue Account (HRA), which is separate from the main budget.
Council housing debt was previously held by the UK government, but in 2012 this debt was transferred to each stock-holding council's HRA.
The reforms meant that Stevenage Borough Council was required to pay £199m to the Treasury, of which £194m is still left to repay over a 30-year business plan.
That debt makes up more than 85 per cent of the council's total borrowing, while a further £7.5m in HRA debt has been taken on this financial year to invest in new and existing housing stock.
Other councils with housing stock have also reported high levels of total debt, such as St Albans City & District Council where the figure stands at £211,486,000.
A spokesperson for Stevenage Borough Council explained: “The HRA debt is 99.25 per cent of the council’s total debt which is funded from housing rent.
"It is not included in the council’s core spending power and the majority of the debt was paid to the treasury as part of the self-financing deal in 2012.
"Many councils no longer have housing stock. The debt funded from core spending power is only 0.77 per cent or £19.66 per resident.”
North Herts Council, on the other hand, does not maintain its own stock of council homes.
Responding to figures showing that the council owes lenders £357,000 - equivalent to just £3 per resident - Cllr Ian Albert, executive member for finance, said: "We are a well-run council that prides itself on its sound financial management on behalf of our residents.
"Our services are much valued and we will not put those at risk."
However, he did warn that borrowing is set to increase in the coming years: "Our capital spend relates to important projects that enable us to deliver services and deliver better outcomes for our communities.
"We use our capital reserves and grant funding where we can, but it is likely that we will have to start to borrow in future years as the funds gained from the transfer of housing stock to Settle over 20 years ago have gradually diminished.
"If we do need to borrow, we have a clear strategy to ensure our borrowing is prudent with robust plans to repay any anticipated debt costs."
Cllr Elizabeth Dennis, leader of North Herts Council, said that alongside the significant cut in local funding since the Conservatives came to power in 2010, the cost of delivering services has increased by 29 per cent.
She said: "The government urgently needs to address the growing financial crisis facing councils and come up with a long-term plan to sufficiently fund local services through multi-year settlements."
A spokesperson for the council said that their £357,000 debt is "not yet due", and that "it does not make financial sense to repay it early".
They said that the council has "not carried out any property investment that has the main purpose of generating income".
A spokesperson for the Department for Levelling Up, Housing and Communities said: “Councils are ultimately responsible for their own finances, but we are very clear they should not put taxpayers' money at risk by taking on excessive debt.
“The Levelling Up and Regeneration Act provides new powers for central government to step in when councils take excessive risk with borrowing and investment.
"We have also established the Office for Local Government to further improve accountability across the sector, which will help detect emerging risks and support councils to continue delivering key public services.”
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