Blackpool Council reveal whether spending pressures will see them go bankrupt

The council has ruled out the need to issue a 114 notice which would signify bankruptcy amid national warnings many struggling local authorities may be forced down that path.

Birmingham City Council became the latest council to issue a 114 notice earlier in September preventing all but essential spending on frontline services.

Coun Paul Galley, leader of the Conservative group, told a meeting of the full council he feared Blackpool was moving “towards a precipice”.

He warned working balances, which provide a cushion to ensure the council can meet its financial commitments, now stood at £1m when rules stated they should be at least £3m.

Coun Galley said: “Our own constitution guides us to what that precipice looks like.

“Financial regulation rules state that excess spending does not have the result of reducing working balances below 50 per cent of their normal target level.”

Blackpool Council overspent by £10m last year, and a report setting out the council’s financial position just three months into the current financial year has forecast an overspend of £5.7m for 2023/24.

Council leader Coun Lynn Williams told the meeting the authority would not have to issue a 114 notice despite pressures on spending.

After the meeting she told the local democracy reporting service government cuts had made balancing the books difficult.

She said: “As a result there are always pressures on us financially and these become more difficult with each passing year.

“Government really needs to wake up to these challenges and stop pretending that the number of local authorities that have issued a section 114 notice is just down to bad luck or bad management.

“A fair funding approach is long overdue and is now a matter of urgency.

“I am confident that for this year we will be able to manage within our budget but next year will bring another set of challenges for many local authorities up and down the country, not just Blackpool, and the Government will be facing a crisis on critical services if it does not react soon.”