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Coventry City Council faces bankruptcy without extra funding

  1. By Simon Gilbert

  2. BBC CWR political reporter

38 minutes ago

Image caption,

Richard Brown said increased social care costs and inflation had affected the authority’s budget

Coventry City Council has said it could effectively declare itself bankrupt next year without additional funding from the government.

Richard Brown, the cabinet member for finance, said the council had forecast a £30m budget shortfall.

He added increased social care costs and inflation had affected the budget.

It would mean the Labour-run council would only deliver services it has to by law, such as education.

Labour councillor Mr Brown said issuing a Section 114 notice (where a council cannot commit to any new spending) could be avoided this year.

He said the government had offered a settlement of 3%, but the amount would not cover “anywhere near what the gaps are”.

Image caption,

Cuts to street lighting and charges to garden waste collection could be introduced

The BBC understands councillors have already discussed money saving options such as cuts to street lighting, the introduction of garden waste collection charges and increased ticket prices for events like the Godiva Festival.

When asked about these options, Mr Brown said “everything is on the table”.

He claimed the council had been historically underfunded and had received £120m less each year since 2010, putting it among some of the most poorly funded in the country.

But the government disputed that, suggesting the council received an increase in spending power of up to £30.5m last year.

A statement from the Department for Levelling Up 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.”

Image source, Warwickshire County Council

Image caption,

Warwickshire County Council said it was facing a likely budget shortfall of £12m

Across the border at in Warwickshire, the Conservative-lead county council is facing a likely budget shortfall of £12m, which could be as bad as £106m in a worst-case scenario.

The hole in the finances will lead to cutbacks – but leader Izzi Seccombe said that could cause problems down the track.

She said: “There are many people who would say ‘you just need to do statutory services only’.

“The problem we’ve got is if we just did statutory services, and none of the prevention stuff, we would be spending more money.

“I think we are likely to see council taxes increase, we are likely to see social care precepts being levied, and we are likely, I hope, to see income from government.

“There is a big lobby going on from all of the bodies that represent local government. The LGA (Local Government Association), in my case the County Council Network, there are other bodies as well.

“And our MPs have a role to play to support their residents.”