Gloucester City Council is confronting its most severe financial crisis to date, facing the threat of bankruptcy without urgent government intervention. Council leaders have expressed confidence they will secure a financial bailout between £12.5 million and £17.5 million from the Ministry of Housing, Communities and Local Government (MHCLG) by February to stabilize the council’s finances.
The council risks issuing a section 114 notice if emergency funding is not granted. Such a declaration would halt all new spending commitments and underscore the gravity of the council’s financial distress. In response, the cabinet approved an application for this crucial funding on December 10, anticipating a government decision early next year.
Alongside the funding request, the council has unveiled a comprehensive financial recovery plan addressing underlying cost and revenue issues. Measures include increasing parking fees, introducing a mutual resignation scheme, surrendering the Blackfriars lease, shortening city museum opening days, cutting jobs, and selling off surplus or loss-making properties.
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The community and council members have voiced serious concerns over how the council’s finances have been managed. Labour group leader Terry Pullen criticized the financial oversight, describing previous budget management as “guesswork” rather than based on reliable data.
Deputy leader Declan Wilson echoed the severity of the crisis, acknowledging that the current administration inherited a council “probably already bust” and that this is “probably the biggest crisis the council has faced in its history.” Wilson emphasized that a formal budget monitoring process is now in place, supported by expert advice from the Local Government Association. He assured the public that future financial decisions will be based on accurate figures rather than estimations.
Questions about the impact of the recovery plan’s costs on residents were met with cautious responses, with Wilson noting the many variables involved but expressing confidence in the council’s new leadership team. He stressed a focus on increasing revenue from commercial properties and a commitment to resolving the crisis swiftly to minimize costs to residents.
Regarding negotiations with central government, Wilson reported that discussions with the Ministry for Housing and Local Government are progressing positively. While a final decision is expected in February, early indications suggest the council will receive the assistance it requires.
Wilson warned that if political divisions obstruct the recovery plan, government-appointed commissioners might be sent to oversee the council’s finances. He urged all parties to unite and prioritize the plan’s delivery.
Cabinet members acknowledged the hardship the recovery plan imposes. Housing cabinet member Luke Shervey highlighted the importance of balancing service protection with long-term financial stability. Culture and leisure cabinet member Caroline Courtney expressed deep regret over necessary job cuts, praising the dedication of affected staff. Meanwhile, community engagement cabinet member Rebecca Trimnell voiced concerns over the budget overspend potentially worsening in 2024/25.
Council leader Jeremy Hilton reflected on the difficult financial legacy inherited, including incomplete accounts spanning several years. He admitted to being shocked at the extent of the crisis but welcomed the newfound clarity in the council’s financial position, marking an essential step toward recovery.