Leader of Isle of Wight Council, Phil Jordan, shares this latest news, in his own words. Ed
Following a recent media report with information provided by the BBC’s Shared Data Unit, about short term borrowing, the Isle of Wight Council has released other financial figures, showing a continued reduction in long-term debt, strong financial management, and borrowing levels that remain well below the national average per head of population.
Combination of short-term and long-term borrowing
The Council uses a combination of short-term and long-term borrowing to balance cashflow and fund capital expenditure.
Short-term borrowing is typically used to manage day-to-day fluctuations in income and expenditure – such as the timing of Council Tax, grants, salaries and other creditor payments. It can also be a strategic financial choice to delay long-term borrowing when interest rates are high or are forecast to fall.
Long-term borrowing, by contrast, is usually undertaken through the Public Works Loan Board (PWLB) to fund major capital projects over a longer timeframe and less affected by short term (daily even) fluctuations.
A recent media report, using a snapshot analysis and taken on a specific date, disregarded the overall financial, long term debt position of the Council which has seen debt levels reduce significantly since 2021.
Over the past single financial year (to March 2025)
- Long-term borrowing fell by £10.1 million (a 6.5% reduction).
- Short-term borrowing, which fluctuates daily, rose by £11 million.
- Overall borrowing increased marginally by £0.862 million (0.47%).
Long-term borrowing fallen by £51.2 million
Over the last five years however, long-term borrowing has fallen by £51.2 million (down 25.9%), from £197.7 million to £146.4 million and the overall borrowing (short and long term) has reduced by £60.3 million (down 24.8%), from £242.7 million to £182.4 million.
That equates, on average, to a debt reduction of around £1m each and every month since May 2021.
For comparison, a debt ratio per head of population shows how much better the Isle of Wight council is managing its finances over the past five years compared to the national average. The Isle of Wight Council manages the debt ratio, on average, at 25% lower than the rest of the country on debt per population head.
Per head of population – 142,396 residents
- Total borrowing stood at £1,281 per head in March 2025.
- This compares to £1,275 per head in March 2024 – an increase of just £6.05 per resident.
- Over the past five years, borrowing has reduced by £430 per head of population
- Borrowing per head remains well below the England average of £1,688
These figures highlight a consistent downward trend in long-term borrowing, demonstrating prudent financial management despite ongoing financial pressures faced by local authorities nationally.
Jordan: Reduced long-term borrowing by more than £50 million in the last five years
Councillor Phil Jordan, Leader of the Isle of Wight Council, said,
“Unfortunately, short term snap shot analysis of finances can be very misleading. These figures show that the Isle of Wight Council is managing its finances responsibly and sustainably.
“We have reduced our long-term borrowing by more than £50 million in the last five years, which is a significant achievement given the challenges faced by councils across the country. While short-term borrowing will always fluctuate depending on daily cashflow, our overall debt per head remains well below the national average.
“This puts us in a stronger position to invest in the Island’s future while ensuring we continue to deliver essential services for residents. The Council is managing the difficult current financial position in a prudent way that protects our Island and our residents, in turn saving loan payment costs to be used, instead, on the vital services we deliver.
“I estimate that since 2021 we are now saving around £3m – £4m each year on loan cost repayments which are further helping us deliver important services for all Islanders.”
