East Ayrshire Council has debts of almost £400million, 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 East Ayrshire owes a total of £396.761m to lenders – equivalent to £3,252 per local resident.

This is higher than the UK-wide equivalent of £1,455 per person - and one of the highest in the country.

Across Scotland, local authorities were in debt to the tune of more than £14billion – 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.

East Ayrshire Council could not be reached when approached for comment.

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.”