Brits have been warned that £156.4bn of local authority debt is a "ticking time bomb for taxpayers". Local authority debt in the UK has reached £156.4billion - up by 4% since the previous year, new research has shown.

Figures obtained by The TaxPayers' Alliance have confirmed it represents a £6bn increase compared to 2025. Meanwhile, the net debt of the public sector - the cumulative effect of past borrowing that is typically expressed as a percentage of gross domestic product (GDP) - has now reached over £2.9trillion (93.7% of GDP).

According to the findings, England accounted for 80% of the local authority debt, totalling £127billion. This is now is the equivalent of more than 53 million council tax band D bills on average. Per resident, the debt now sits at £2,232, which is double the same figure in 2009-10.

A briefing published by The Taxpayers' Alliance states: "In recent years, rising interest rates and growing service pressures in parts of the local government sector have brought renewed attention to the sustainability of council finances, with seven councils issuing 11 section 114 notices between 2018 and 2023, effectively declaring bankruptcy.

"Taxpayers ultimately stand behind these obligations, therefore transparency over the scale and distribution of council debt is essential."

John O'Connell, the group's chief executive, said: "The mountain of local authority debt is a ticking time bomb for taxpayers who will ultimately be left holding the bag.

"Decades of speculative investments, reckless borrowing and statutory obligations from Westminster have left councils stuffed to the brim with debt, while basic services like fixing potholes have been neglected.

"Local authorities need to urgently get a grip on their debts before even more end up going completely bust."

Commenting on the research, Shadow Housing Secretary Sir James Cleverly, told GB News: "Labour promised to strengthen local government, but the reverse has happened.

"Their top-down reorganisation plans are causing chaos. West Surrey, for example, will have to spend 40% of its income on debt. And with Andy Burnham promising more devolution, Labour Mayors could be hiking taxes even more to plug the gap.

"Labour have their heads in the sand. The Conservatives are the only party with a plan to get spending under control, cut debt and deliver a stronger economy and stronger country."