Bradford Council close to being bankrupt

bradford council close to bankruptcy

Bradford Council will issue a Section 114 notice – effectively declaring itself bankrupt – without “exceptional” government help, a report has said.

A Section 114 notice would mean it may have to stop all new spending apart from essential services including social care and waste collections.

A £73m overspend for the current year is predicted for the local authority.

The government said it had made £45.9m available to the council and was open to discuss pressures.

Financial support for local authorities that the council hoped would emerge in the chancellor’s Autumn Statement in November did not happen, the Local Democracy Reporting Service said.

The statement actually added to Bradford’s financial black hole, the finance document adds.

The council said it would have to implement a “significant savings plan”, likely to include job cuts, and carry out “a plan for the disposal of council-owned land and assets”.

Budget proposals will be revealed early in the new year. This is expected to take into account owed monies.

‘Perilous’ finances

A report going before the council’s executive next Thursday says it will make a request to the government for “exceptional financial support” over the next two years.

It blamed government cuts and spiraling costs of children’s social care placements for the predicted overspend.

The report explains: “The council faces an unprecedented financial situation with significant funding gaps forecast for the current financial year and for 2024-25 and beyond.

“Since 2011, Bradford Council has had to find over £350m in cuts and savings due to national austerity measures, inflation and increased demand.”

It continues: “More recently exceptional inflation and energy prices have put additional pressure on budgets for all local authorities.”

Councillor Susan Hinchcliffe, Bradford Council leader, said: “Our finances, like many other across the country, are in a perilous position.

“We are being forced to look at all the services that we provide and make extremely difficult decisions and we know these will not be popular and will have an impact on our residents.”

A spokesperson for the Department of Levelling Up, Housing and Communities said an extra £45.9m of funding had been made available to Bradford Council in the last financial year.

“We expect that councils will see, on average, an above-inflation increase in their core spending power next year,” the spokesperson said.

“We stand ready to speak to any council that has concerns about its ability to manage its finances or faces pressures it has not planned for.”


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