Bolton Council lent over £150M to other councils over 2023

This includes around £10M lent to Birmingham City Council, which effectively declared itself bankrupt last autumn and has been forced to raise council tax by 21 per cent.

Bolton Council’s audit committee heard how the authority had also lent around £10M to Manchester City Council and another £10M to Liverpool, making up a much bigger total.

Chair Cllr Martyn Cox said: “If I’m not mistaken that figure is £192,300,000 and that’s invested with a variety of institutions including banks but significantly, quite a number of local authorities.”

He asked officials to explain this process for the benefit of the committee.

The full break down presented to the audit committee (Image: Bolton Council)

Cllr Cox said: “They might be wondering why we’re lending Liverpool City Council £10M for example.”

The £192,300,000 figure referred to the total investments as of December 31 last year.

Of this, the total in short term investments came to £174,700,000.

Documents put before the council show that as well as Birmingham and Liverpool, Bolton Council also lent money to councils as far afield as Blackpool, Eastbourne and Lambeth.

The council had also lent around £15M in two instalments to the Police and Crime Commissioner for Merseyside.

Money was also lent to Goldman Sachs International Bank on a short-term basis.

All the short-term investments looked at by the committee were made between January and December last year.

Birmingham City Council especially has hit the headlines in recent months after being forced to make swinging cuts after declaring itself effectively bankrupt.

The West Midlands authority is now in the process of trying to make around £300M in cuts to public spending, likely to affect parks, libraries and cultural projects across the city.

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But in Bolton, the audit committee heard how local authorities are underwritten by the central government “considered to be about as safe a place” to put money as possible.

They heard that though Bolton is unlikely to consider borrowing on a short-term basis, the council is in a position where it can lend money out.

All the short-term investments have interest rates at above four per cent.

Council officials said that failing to pay back the money was “not something that any local authority would ever consider doing.”