Green MSP John Finnie (pictured) has written to the UK Treasury calling for Highlands Council to be granted a repayment holiday for its debt to the Public Works Loan Board (PWLB).
The PWLB is administered by the UK Government and provides loans to local authorities, primarily for significant capital projects.
Highland Council currently owes the PWLB more than £700m, with Highland Council spending more than £40m a year servicing the debt.
In October 2019 the Treasury announced it was increasing the interest rate for PWLB loans significantly.
Mr Finnie said:
“Many individuals and businesses have been given repayment holidays, rates relief or other financial support during the coronavirus pandemic.
“It’s now time for the UK Treasury to offer that same support to local authorities who have been on the front line of supporting people affected by COVID-19.
“A temporary repayment holiday from PWLB would significantly relive pressure on Highland Council as we begin to recover from this devastating virus.
“I call on the Chancellor to do the right thing and offer this modest helping hand.”