Executive meeting of Council, Thursday January 11th, 2024.
The Council Executive met on Thursday to discuss budget proposals for 2024/25. I, along with others, attended that meeting to ask questions raised by residents, and I had a few of my own. Of the 5 prepared questions, I was allowed to ask only 2. However, the question of Golden Butts recycling centre was raised, and a question asked by the Conservative Group in response to the hundreds of emails I had received.
Other attendees include a member of the Green party, who was there to listen and observe, and a member of the Labour Group who supported the cuts documented in the Executive report. In total, the meeting lasted 50 minutes. This compares to 10 minutes spent discussing the latest Ofsted Children’s services report at Tuesday’s Executive, and a 3-hour discussion about the situation in Gaza at a full council meeting in December.
What’s the story?
Even though Conservative councillors voiced serious warnings about Council finances, it was only in January 2024 that Labour admitted things had gone horribly wrong.
There is a truth which needs to be revealed in all of this, and we need to ask whether we’re all being told the truth or otherwise. ‘Deflection‘ is the enemy and it’s difficult to differentiate between truth and deflection in some of the statements being made by the council. I believe that there’s a balance to be struck, but that’s for you to decide and it involves a lot of report reading.
Executive papers.
The papers from the Extraordinary January 11th budget meeting are available on Bradford Council’s website at https://bradford.moderngov.co.uk/ieListDocuments.aspx?CId=143&MId=8220 or you can access the document here.
To summarise the content we have:
A statement that Government austerity is the cause of the state of council finances, but is this true? There are other councils issuing Section 114 notices, there’s no denying that fact. Austerity in many cases is a factor alongside other causes, such as pay equality at Birmingham City Council. Whether this is the case at Bradford Council is unclear, so we need to read the full report and dig deeper.
The summary below are the key quotes from the council’s budget document:
- Section 2.3 page 8. In 2023-24 the Council used c£48m of one-off reserves to help balance the budget and pay for Children’s Social Care and other pressures. Costs have however continued to grow, and the Council is forecast to overspend by c£73m in 2023-24. This therefore results in a c£121m ongoing budget gap in 2023-24 which is not financially sustainable.
- Section 2.25 page 12. Bradford Council has had c£350m of budget reductions since 2011 because of national austerity measures, increasing demand for social care services and rising costs. The cumulative impact is in the region of £2bn over the period.
- Section 12.2, page 37. Since 2010 Bradford Council has had to take out £350m from services. During this time the Council has continued to prioritise front line services to all communities across the district. The reduction of this scale, and the further proposals contained within this report mean that difficult decisions must be made, and these decisions will have an impact on the lives of Bradford’s residents.
Importantly, with all the above quotes in mind, look at the Reserves graph on page 31 of the Executive report. This is shown below.
The chart is quite revealing and, in my mind, raises some very interesting questions.
The Labour led council will always blame ‘austerity’ and the Government for their financial problems. It’s an obvious deflection tactic and doesn’t tell the full truth. Between 2011 and 2020, during ‘austerity’, the Council still managed to add £65million (note 1)** to its total financial reserves. It simultaneously spent £88million of them. Now reserves are close to zero – implying £153million of overall funding was allocated to local Labour policy decisions.
So why have all financial reserves been exhausted so quickly? At a key period in 2017/18, the Labour Council ‘leader’ failed to support the Children’s Services team, by bringing salaries into line with other local authorities. This led Bradford’s social workers, and other officers, to find employment with other local authorities. Bradford’s costs then ramped up because the only solution was to employ agency staff. The shortage of experienced social workers then led to failure within Children’s Services and a huge spike in numbers of Children in Care, who have had to be accommodated at an eye watering cost.
In addition, financing major city centre capital projects such as Darley Street market, One City Park offices, purchasing the city centre Kirkgate site and the Moors Shopping Centre in Ilkley haven’t helped!
Note 1 ** Excluding the gross distortions of a capital financing accounting change and COVID funding.
Perhaps some of this is explained in the following Guardian article: https://www.theguardian.com/uk-news/2022/jan/25/childrens-social-services-in-bradford-to-be-handed-to-independent-trust
Clearly, the escalating cost of children’s services, is a factor. At a previous executive meeting (November 7th, 2023) it was noted in section 10.12, page 23 of the report, the reasons for the overspend. Sections 10.4, page 21, 10.8 and 10.10 on page 22, are equally revealing. We had 95 more social workers working in Children’s services, than were included in Council accounts. The cost of the 95 Social workers equated to £9.5 million, in addition to external placement of unaccounted for children. There’s a lot more reading required and the 2022/23 and 2023/24 budgets need to be considered, alongside October 2023’s Executive report. These are all available via Bradfpord’s website at https://bradford.moderngov.co.uk/mgCalendarMonthView.aspx?GL=1&bcr=1
Six local authorities have declared bankruptcy since 2021.
Councils across the country find themselves in a turbulent financial position. Since 2021, six local authorities have declared themselves effectively bankrupt, with a raft of councils warning they may have to do the same. Exclusive polling of English councillors by New Statesman Spotlight revealed that a quarter of councillors believe their council will soon go bankrupt.
In December, research by the Local Government Association revealed that almost 1 in 5 council leaders and chief executives think it is very or fairly likely that they will need to issue a Section 114 notice this year, or next year due to funding shortfalls. Read the full article here.
Croyden Council have been forced to issue a full statement about their financial position, see https://www.croydon.gov.uk/council-and-elections/budgets-and-spending/cost-accountability-march-2023?fbclid=IwAR0OaIvuLmlXwUEp1GbJMWL2IWfDSq7-B1iHt74qKKEbnIl1nc6JydL_XVA
Nottingham City Council – November 2023
After issuing a warning in October 2023, Nottingham City Council issued a Section 114 notice on 29 November. The council’s Chief Finance Officer – or Section 151 Officer – issued the notice and said the authority will be unable to deliver a balanced budget for the 2023-24 financial year. The council has been under government observation after the collapse of its council-owned company, Robin Hood Energy in September 2020. A report prepared for a meeting of the council’s executive board on 21 November indicated the authority is facing a £23m overspend. The significant gap in Nottingham Council’s budget has been caused by issues such as an increased demand for children’s and adult’s social care, rising homelessness pressures, and the ongoing impact of inflation.
Birmingham City Council – August 2023
Due to a backlog of equal pay claims, and a failed changeover of its IT systems, Birmingham City Council – Europe’s largest local authority – issued a Section 114 in August. The council faced an £87m budget shortfall and said the cost of its equal pay claims bill was up to £760m. In the past decade it has paid out £1.1bn in such claims. A paper prepared for the council’s cabinet in June said the cost of properly implementing its new IT systems could be in the region of £100m. Downing Street has since commissioned an independent governance review of the council. This year Ian Ward was ousted as leader of the council by the national Labour Party after a damning review found issues of factionalism and dysfunction within the council’s leadership.
Woking Borough Council – June 2023
Following a failed investment strategy, propelled by borrowing hundreds of millions of pounds for local regeneration projects, Woking Borough Council issued a section 114 notice in June. The council – which invested in building a new shopping centre, residential skyscrapers and the cutlery for a 23-storey Hilton hotel in the town centre – has debts which are forecast to reach £2.6bn. The Liberal Democrat council leader Ann-Marie Barker, who assumed the role in 2022, conceded that the local authority “had got used to living beyond its means” and needed a “reset” on how it conducted itself. Three weeks prior to the council officially issuing a section 114 notice, government-appointed commissioners were brought in to address the “exceptional level of financial and commercial risk” the authority faced.
Thurrock Council – December 2022
Thurrock Council issued a section 114 notice in December 2022. The council said it faced a £469m funding gap and barred any non-essential spending. Thurrock’s situation emerged after it provided £655m to companies via bonds, including the purchase of 53 solar farms. This investment was paused in September 2020, and in September 2022 Greg Clark, the levelling up secretary at the time, announced he was appointing Essex County Council as commissioner to oversee the running of Thurrock.
Croydon Council – November 2022
Last November Croydon Council issued a section 114 notice for the third time in two years. It had debts that totalled £1.3bn. At the time of being declared effectively bankrupt, the council was paying £47m a year – a sixth of its annual budget – to pay off existing debts, and would have had to make £130m worth of cuts to meet its legal duty to balance the books. Following the 2022 local elections, no party has overall control of the council. Labour ran the council previously, and has been in a long-running argument with the Conservatives over which party is responsible for the authority’s dismal finances. The council first went bust in 2020, which was largely attributed to a series of failed property investments and overspending on social care.
Slough Borough Council – July 2021
Slough issued a section 114 notice in July 2021 after Robert Jenrick, the housing, communities and local government secretary at the time, commissioned an external assurance review of the council. A series of financial issues led to Slough’s bankruptcy, including the quadrupling of council borrowing from £180m to £760m since 2016-17. Commissioners remain at the council. Their most recent report, which came out in September, said that Slough would require continuous financial support until at least 2028.
