Councils considering bankruptcy
Some UK councils are considering declaring ‘bankruptcy‘. Their finances cannot cope with the financial pressures of the pandemic.
There is an estimated £10 billion black hole in local council finance; many authorities are now openly discussing a ‘114 notice’, which signals their bankruptcy. A report in The Times newspaper said that councils in the Yorkshire and Humber region are thinking of making a joint declaration. The problem is that as revenue has gone down additional bills in these regions have jumped £600m. There are another 120 local councils looking at a 114 notice.
Making such a move would impose severe restrictions on spending and massive cuts in services such as parks, libraries and museums.
One senior local government source has been quoted as saying: “Many finance directors have their finger on the 114 notice trigger. The end of the financial quarter in June may be when they pull it if they continue to lose confidence that councils will receive the support they need from government.”