Coventry City Council has revealed it is facing bankruptcy next year unless it gets more money. The stark revelation - reported this morning by Simon Gilbert at the BBC - has seen a senior councillor reveal the authority has forecast a £30m budget shortfall.
Richard Brown, the cabinet member for finance, said rising social care costs and inflation had hit the council's budget. The admission comes just weeks after Birmingham City Council was effectively forced to declare itself bankrupt amid a huge shortfall in funding, meaning it can only deliver services it is legally required to, such as education.
Birmingham was forced to issue a so-called section 114 notice. Labour councillor Mr Brown said taking this step could be avoided this year in Coventry, but there are serious concerns over next year unless the council gets more government funding.
The BBC reports that cuts to street lighting, introducing garden waste collection charges and raising ticket prices for events like the Godiva Festival are all options being discussed by councillors. Mr Brown said "everything is on the table" - although the government disputes his claim the council is poorly funded.
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Cut backs could come in Warwickshire
As well as highlighting issues at Coventry City Council, there are also believed to be similar problems in neighbouring Warwickshire.
The BBC report states that Warwickshire County Council is facing a likely budget shortfall of £12m.
This could lead to cutbacks and its leader, councillor Izzi Seccombe has warned that this could have a domino-effect and could cause problems down the track.
Government statement
Following the concerns raised by Coventry City Council, the BBC obtained a statement from the Department for Levelling Up.
It 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.
Not just Coventry
It is not just Coventry City Council that is facing financial worries.
There are also three councils in Warwickshire that have reported finance concerns.
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No section 114 notice this year - but it could come
Labour councillor Brown told the BBC that issuing a Section 114 notice could be avoided this year.
But the local authority could face a similar scenario to neighbouring Birmingham as he said that the government had offered a settlement of 3 per cent,
But he warned that this amount would not cover "anywhere near what the gaps are".
