Gloucester City Council is grappling with the largest percentage drop in spending power among England’s local authorities over the past ten years, according to recent government financial data analysis.
The Liberal Democrat-led council is seeking an urgent bailout loan ranging from £12.5 million to £17.5 million to avoid near bankruptcy. Following audits revealing multi-million-pound discrepancies in previous financial years, council officials have applied for exceptional financial support.
Without this loan, Gloucester City Council faces issuing a section 114 notice, effectively freezing any new spending commitments.
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The financial shortfall results from multiple factors: a 2021 cyberattack that hampered accounting and audits, underperforming investments—including delays to The Forum development—increased borrowing costs, heightened IT expenditures, and overestimation of income from fees and charges.
Furthermore, between 2015 and 2025, Gloucester’s core spending power decreased by 3.9%, dropping from £15.9 million to £15.2 million—positioning it at the bottom nationally in terms of government funding support.
In comparison, neighboring councils have seen substantial growth: Cheltenham Borough Council’s funding rose by 12.8% (from £14 million to £15.8 million), Cotswold District Council’s by 19.1% (from £10.7 million to £12.7 million), and Tewkesbury Borough Council’s by 27.7% (from £9 million to £11.5 million).
On average, councils across England experienced a 55% cash increase over the same decade.
When adjusted for inflation, Gloucester’s spending power should now be approximately £21 million to £22 million to keep pace with rising costs. Instead, it stands at just £15.2 million, equating to a real-terms reduction of £6 million to £7 million annually—a roughly 30% cut over ten years.
Council leader Jeremy Hilton (LD, Kingsholm and Wotton) stated: “These figures are stark and indefensible. While councils elsewhere have seen funding rise significantly, Gloucester has gone backwards. A real terms cut of around 30% over a decade is not a coincidence. It is the result of sustained underfunding.”