Gloucester City Council has experienced the steepest percentage decline in spending power among all English councils over the past ten years, according to recent Government financial analyses.
The Liberal Democrat-led council now faces a critical financial situation, requiring an emergency bailout loan estimated between £12.5 million and £17.5 million to avoid effectively declaring bankruptcy.
Following the discovery of millions of pounds in accounting shortfalls during audits of past financial years, council leaders have submitted a formal application for exceptional financial support. Without this funding, the council would be forced to issue a section 114 notice, halting any new spending commitments.
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The council’s financial troubles trace back to a cyber attack in 2021, which led to disrupted accounting practices and missed audits. Additional strains include delayed investments such as The Forum project, rising borrowing costs, unexpected IT expenses, and overly optimistic revenue projections from fees and charges.
Beyond these immediate challenges, Gloucester’s core spending power has fallen by 3.9% in cash terms between 2015 and 2025, dropping from £15.9 million to £15.2 million. This places Gloucester at the bottom nationally in terms of Government financial support.
In stark contrast, nearby councils have seen substantial increases over the same period. Cheltenham Borough Council’s core spending power grew by 12.8%, rising from £14 million to £15.8 million. Cotswold District Council increased by 19.1%, from £10.7 million to £12.7 million, while Tewkesbury Borough Council saw a 27.7% boost, moving from £9 million to £11.5 million.
Nationally, councils benefited from an average cash increase of 55% during this decade.
Adjusting for inflation, Gloucester’s council leaders highlight that its current spending power would need to be between £21 million and £22 million simply to keep pace with rising costs. Instead, it currently stands at only £15.2 million — a real terms reduction of approximately £6 million to £7 million annually, or roughly 30% over the last ten years.
Council leader Jeremy Hilton (LD, Kingsholm and Wotton) expressed his frustration: “These figures are stark and indefensible. While councils elsewhere have seen funding rise significantly, Gloucester has gone backwards. A real term cut of around 30% over a decade is not a coincidence. It is the result of sustained underfunding.”