North Ayrshire Council has debts of almost £240 million, a report has revealed – amid warnings of “staggering” debt levels at local authorities across the UK.

Figures published by the Department for Levelling Up, Housing and Communities (DLUHC) reveal that North Ayrshire owes a total of £239.956m to lenders – equivalent to £1,788 per local resident.

This is higher than the UK-wide equivalent of £1,455 per person.

Across Scotland, local authorities were in debt to the tune of more than £14 billion – a total of £2,562 per person.

For more than a decade, town hall chiefs have been encouraged to borrow funds to invest in local schemes and commercial properties.

The data comes from the DLUHC’s figures on borrowing and investment levels across the UK’s 380 councils, and includes the amount each authority spends in servicing borrowing as a proportion of its core spending power.

The figures – analysed by the BBC Shared Data Unit - were correct as of September 30, 2023, the end of the second quarter of the 2023-24 financial year.

The highest debt level of all was at Woking Borough Council in Surrey, which, according to the figures, owed £18,756 per person.

The biggest figure in Scotland was at Comhairle nan Eilan Siar (Western Isles), which owed £4,845 per resident.

A North Ayrshire Council spokesperson said: “Our debt position is linked to our capital investment programme where money is borrowed to finance key strategic assets for the benefit of our communities, including schools, roads, flood prevention infrastructure, lighting, active travel infrastructure etc.

“Council borrowing is undertaken in accordance with approved treasury management policies and practices and the council must demonstrate that its investment plans are prudent, affordable and sustainable over the long-term.

“The council services its debt annually and financial provision is made for this as part of the council’s medium and long-term financial planning.

"The council continues to operate a prudent borrowing policy with the proportion of financing costs to net revenue projected at 2.5 per cent for 2023/24. This is set against a Scottish average of 5.5 per cent.

“Moving forward, we anticipate a very challenging financial landscape for the council, however, we will continue to operate within available funding parameters, with the impact on the council tax payer of North Ayrshire being at the forefront of any decisions when setting the council budget.”

Dame Meg Hillier MP, chair of the House of Commons’ public accounts committee (PAC), said: “Some of the outlier examples of high local authority debt are staggering, and the impact on services for residents is liable to be extreme and long-lasting.

“There are of course many drivers of the present situation, not least the day-to-day pressures experienced by local authorities with squeezed spending power and ageing populations living through difficult economic times.

“The PAC warned in 2020 that some councils had not only pursued strategies of commercial investment exposing them to high levels of risk, but normalised behaviour and optimistically believed that there was little downside to commercial activity. Add to this the delay in public sector audits and many councillors and taxpayers were blind to the risk.”

A DLUHC spokesperson 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.”