Council hoping to hold off bankruptcy with budget cuts

And this may require the Council to borrow up to £450 million before 2030 - something an opposition councillor warned would create a 'doom loop' amid the future pressure to servicing such loans.

Next Tuesday, the Council’s decision-making Executive will discuss its budget proposals for the coming year – a budget that will include a 4.99 per cent Council Tax rise, the sale of swathes of Council properties and cost increases.

A thought-provoking image of Bradford City Hall (Image: Anna Dyson-Clarke: T&A Camera Club)

Three household waste centres are due to shut, as is Ingleborough Hall children’s education centre in North Yorkshire.

Almost 13,000 people responded to a consultation on the Council’s budget proposals, with the closure of the three tips (Sugden End in Cross Roads, Golden Butts in Ilkley and Ford Hill in Queensbury) receiving the most responses.

Feedback from a public consultation will also be discussed at the meeting before it goes before the full Council next Thursday for a vote.

But despite objections, the proposed cuts are expected to be approved, with financial officers saying the budget proposals need to be implemented in full to avoid bankruptcy.

Late last year, the Council said that budget pressures meant the authority was facing effective bankruptcy.

Council bosses wrote to Government to ask permission for a “capitalisation direction” – which would allow the authority to borrow money to fund services.

It would also lift a ban on using money from the sales of land or property to fund services.

If this support did not come from Government, the Council would have to issue a Section 114 notice – in essence declaring the Council bankrupt.

It is expected that a decision on this will be made by Government before next Thursday’s meeting.

The report to the Executive says the Council’s s151 (chief financial) officer says that if this request is successful, and if all the cuts and price rises included in the draft budget are approved, then the Council will avoid bankruptcy.

It says: “The s151 officer is not minded to issue a s114 notice at this point working on the basis that the above assumptions will be supported and seen through on time and in full.

“Nevertheless given the extremely challenging financial situation the Council finds itself in, and has in recent months started to address, if the recommendations are not agreed and the assumptions are not delivered as assumed then very serious consideration will be given to the issuing of a s114 notice.”

Members will also be told the Capitalisation Direction might have to “continue through to 2029/30 and may total £450m.”

After the publication of next week’s Executive agenda, Councillor Susan Hinchcliffe, Leader of Bradford Council, said: “We have been clear for some time that the Council’s finances, like many others across the country, are really challenged.

“We now have to take some really difficult decisions, with more to come in the future, if we are to ensure the Council’s long-term financial sustainability and continue to provide essential services.

“We know from the comments made through the consultation that people care passionately about their local services. The Council has looked at all the comments that have come in.

“However the financial challenge is so great that we sadly are not in a position to prevent the proposed cuts. We have tasked council officers to work with partners to reduce the impacts of these cuts on our local communities as much as possible.”

Councillor Mike Pollard (Con. Baildon) the Conservative Group spokesman on Finance and Projects commented: “Each successive financial document that gets presented to the Labour Executive looks ever more spectacularly bad.

Councillor Mike Pollard (Image: newsquest)

“Even in advance of what Mr Gove might have to say in the DLUHC letter which we expect to land on the Leader of Council’s desk at any moment, it’s not hard to hazard a guess at what further intervention measures the Government may have in mind.”

Referring to the interest that would come with the borrowing needed, Cllr Pollard added: “This is putting the Council into the ‘doom loop’ territory of servicing a maxed out Municipal credit card using another one. It is difficult to see how Cllr Hinchcliffe can avoid ‘doing a Birmingham’ and requesting the Government for permission to increase the Council Tax by significantly more than the ‘referendum threshold’ level of 4.99% currently assumed.”