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MP Condemns Gloucester City Council’s Financial Crisis Amid Calls for £17.5m Government Bailout

Gloucester MP Alex McIntyre has expressed deep concern and frustration over Gloucester City Council’s urgent request for up to £17.5 million in emergency government support to avoid a financial crisis. The Labour representative calls the situation “appalling” and warns of significant consequences for the city and council employees.

Though local authorities cannot technically declare bankruptcy, the council faces the possibility of issuing a section 114 notice, a formal acknowledgment that no new spending commitments can be made due to severe financial shortfalls. Gloucester City Council has reportedly been negotiating with the Ministry of Housing, Communities and Local Government for several weeks to secure the necessary funds.

The council attributes its financial troubles primarily to the aftermath of a crippling cyber-attack in December 2021, which delayed an accurate assessment of its accounts. Only recently, through audits conducted by external reviewers, has the full scope of the overspending become clear.

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McIntyre has pledged his full support to lobby for the government bailout but stresses the urgent need for transparency and accountability regarding how the council allowed such substantial overspending to persist unnoticed for multiple years.

“There is no way of sugarcoating it — the council faces serious debt due to consistent budget overspends,” McIntyre said. “They are seeking emergency funding to stay afloat; without it, the reality is bankruptcy.”

He expressed concern over the fallout this mismanagement will have on staff, including potential job losses, and on Gloucester residents, who may face cuts to public services, restricted discretionary spending, and increased charges for waste collection.

To address the financial shortfall, the City Council has proposed several stark measures:

  • Closing Blackfriars Priory as a wedding and events venue from May next year
  • Limiting Museum of Gloucester’s opening days to four per week
  • Reducing funding for local events and festivals
  • Eliminating Councillor grants
  • Downsizing the Community Engagement team
  • Introducing a voluntary resignation scheme for staff

McIntyre emphasized his commitment to working across party lines and listening to residents’ concerns to protect as many frontline services as possible. He also expressed disappointment that the council had not informed him sooner about the severity of the financial issues.

“At the moment, the budgets from 2021 onward were inaccurate, meaning the council was unaware of the true financial position,” McIntyre explained. “There are serious questions about how such large overspends could go unnoticed for years.”

The coming period is expected to be challenging for Gloucester, with difficult decisions ahead. McIntyre acknowledged the anger and anxiety this news will cause but reaffirmed his dedication to securing the city’s recovery.

The council’s recovery strategy includes borrowing to cover operating costs, asset sales, and improved financial management. They aim to enhance accountability, strengthen reporting accuracy, and maintain clear communication with residents.

Resources cabinet member Declan Wilson commented, “We want to be as transparent as possible about the challenges we face. These tough decisions are necessary to balance the budget and safeguard essential services. Exceptional financial support will provide the breathing space needed to secure the council’s future.”

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