More Councils to Go Bust

Experts are predicting that more councils will declare ‘bankruptcy’ after the government rejected calls for extra social care funding for authorities in 2024-25.

Think tank the Institute for Government (IfG) made the claim after the provisional local government finance settlement included no extra resource for authorities beyond that already committed, despite leaders’ calls for extra cash.

Five authorities with social services responsibilities – Birmingham, Croydon, Nottingham, Slough and Thurrock – have issued a section 114 notice in the past three years, meaning they were unable to meet their legal requirement to set a balanced budget.

Section 114 notices tend to be followed by government intervention to direct the relevant authority to address financial problems and large cuts to non-discretionary spending. Authorities must continue to meet their statutory duties, meaning social care spending is largely protected.