Ourense council arrears jump to €35 million

A city council debt story can sound dry. But this one is really about whether a town hall can still function like a normal customer. In Ourense, the answer is looking shakier by the week. The council closed March with €35.4 million in recognized unpaid bills to suppliers, and the real pile is even larger once unprocessed invoices are counted. ### What actually jumped? The headline number is commercial arrears — money the Concello de Ourense already recognizes it owes but still has not paid. At the end of March, that figure stood at €35.4 million, or roughly €338 per resident. That made Ourense the most indebted large Spanish municipality by this measure on a per-person basis. ### Why is the real hole bigger? Because the official arrears figure does not capture everything. Another 1,601 invoices worth €15.7 million were still sitting outside the normal processing pipeline, which means they had not even been formally approved yet. Add those to the recognized unpaid bills and the unpaid total moves past €51.1 million overall. ### Who is getting squeezed? Suppliers first. These are construction firms, service providers, and contractors doing work for the city and then waiting months — or longer — to get paid. One emblematic case is the Concordia street project: three years after the works were inaugurated, and two years after the invoices were issued, this is a sign that completed public works can remain financially unresolved for years. ### Is this just a late-payment problem? No — it is tied to a broader breakdown in municipal finances. The 2026 budget draft itself admits that 2025 ended with a €45.7 million deficit and a €31.9 million breach of Spain’s spending rule. That automatically pushes the city into a Plan Económico-Financiero, basically a state-supervised adjustment plan meant to drag the accounts back into legal bounds. ### What does that adjustment plan do? It freezes room to maneuver. Ourense says it has a treasury surplus of €59.5 million, but the adjustment plan bars the city from freely spending most of it. Investment funded from those savings is capped at €20 million in 2026 and €14 million in 2027, leaving around €39 million effectively trapped in the mess. ### Why are state funds frozen too? Because the problems are not only about paying suppliers. The Finance Ministry has also been withholding transfers to Ourense for repeated accounting and reporting failures. By early May, the city had gone five straight months with state revenue withheld, totaling €13.7 million since December 2025. Ourense was described as the only Spanish city under that specific penalty. ### Why does the missing 2026 budget matter? Because a city already under financial stress is trying to operate without fully approved current-year accounts. As of May 5, Ourense was one of only four provincial capitals in Spain still without an approved 2026 budget or a firm deal to pass one. That makes it harder to normalize payments, plan investment, and reassure companies that city contracts are still bankable. ### Bottom line? This is not one bad invoice cycle. It is a municipal credibility problem. Ourense is dealing with recognized arrears, hidden invoices, frozen state money, and a forced recovery plan all at once — which means the real question is no longer just when suppliers get paid, but how the council rebuilds basic financial control.