'Hell will freeze over' before struggling county council declares bankruptcy, says defiant leader

Officers call the council's financial forecast 'concerning'.Officers call the council's financial forecast 'concerning'.
Officers call the council's financial forecast 'concerning'.
Recent documents revealed that the council’s budget gap could realistically exceed £100 million by 2027

Leicestershire County Council’s finances are in a ‘dire’ state, but its leadership remains defiant. Leader of the Conservative-run authority Cllr Nick Rushton told councillors that ‘hell would freeze over’ before his administration filed a Section 114 notice – declaring the council bankrupt.

Recent documents revealed that the council’s budget gap could realistically exceed £100 million by 2027. Council tax increases and spending cuts might not be enough to keep it afloat, the council has warned, and more money is needed from the Government for key areas of spending.

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Previous predictions for spending this year are now thought to have been almost £9 million too low, with the main pressure points on spending being adult social care and children’s services. The authority, which is among the lowest funded in the country, has pledged to protect these services and the vulnerable people who rely on them.

But this is ‘getting harder and harder to do’, Cllr Rushton recently told elected members. The huge costs in these services leaves little money for the council to play with and makes it harder to find areas to save cash, he added.

The council will not, however, become a Birmingham or a Northamptonshire, he insisted. Northamptonshire County Council filed a S114 notice in 2018, indicating an insufficient financial forecast, while Birmingham City Council declared financial distress through a S114 last month and ceased all spending apart from statutory services and those protecting the vulnerable. Councils are legally bound to present a balanced budget each year.

When questioned over whether Leicestershire could share that fate, Cllr Rushton said: “Hell will freeze over before this administration serves a Section 114 notice. In all honesty, it doesn’t solve anything. All they do is send in administrators and tell you to do things that, if we’re sensible, we can do ourselves. There is no magic money tree they send in.

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“While we’re in charge, we are capable of making the tough decisions and we will have to make them.”

He described the council as ‘super-efficient’ and said it prides itself on doing the best it can with the money it has. But he warned some ‘politically very, very difficult decisions’ will need to be made and made soon.

Since 2010, the council, which is responsible for services such as education, highways, social care, waste sites and keeping the street lights on, has already made £250 million worth of cuts. The authority will be looking at efficiency savings again over the next four years.

However, council officers have previously warned it will not be possible to balance the council’s financial position without affecting front line service delivery over the next four years. All service areas are in the firing line for cuts.

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At this stage in the year, the council would normally be able to show a balanced budget for the next financial year. Council officers called it ‘concerning’ and ‘unusual’ that more savings still need to be found for next year.