A union has called on the Scottish Government to support an amnesty on Angus Council loans taken out before devolution.
The local authority spends around £4.32 million every year paying the interest on loans available from the Public Works Loans Board (PWLB) up to 1998.
Unite is taking part in a national day of action calling on Scottish Ministers to help “drop the debt” and protect cash-strapped local services.
As part of its its campaign, members in local authorities across Scotland are holding rallies and collecting signatures to lobby Scottish Ministers on Thursday.
Unite Scottish secretary Pat Rafferty said public services are being “shredded” because of an economic crisis caused by “casino bankers”
“It’s an attack on all of us, from children in nurseries to elderly people needing care,” he added.
“We believe a debt amnesty will help.
“There is already a precedent for it.
“For example, the UK Government wrote off Glasgow City Council’s historic housing debt when its homes were transferred to a new housing association.
“Eventually, we need the UK Treasury to act.
“But if there is going to be any chance of that happening we need the Scottish Government to get on board first.
“We need our government to do everything it can to protect the local services we all rely on from Tory austerity.
“The cuts are taking a massive toll on our members.
“They are having to work harder and harder, with fewer and fewer resources, just to provide basic services to local people.
“We can’t go on like this.”
Unite estimates the annual cost of servicing Angus Council’s debt is around £16 million – not including debts run up under the controversial Private Finance Initiative.
In the 17 years since devolution, Unite estimates that Scotland’s councils have sent back a minimum of £3.3 billion to HM Treasury in interest-only payments, just to cover historic debt to the PWLB.
This year the board was charging Scotland’s councils about 8% a year on 926 loans which date back to the 1990s – nearly four times the highest rate currently available from the same source.
A Scottish Government spokesman said: “It is up to local authorities to decide if they wish to borrow and any commitments are based on what they deem to be prudent and affordable.
“Council tax is not the only way local authorities can manage outstanding debt – they are entitled to use all resources available to them as well as through support from the Scottish Government, including support for the repayment of historic debt, and other income streams.
“Only the lender is able to write off a loan, and the Scottish Government does not lend to local authorities.”
