Hackney London Borough Council, 2000 Hackney London Borough Council issued a section 114 notice on 17 October 2000, predicting that it would have a £15.5m hole in its finances by the end of the
financial year. Budget cuts of around £4.5m were needed for the 2000-2001 financial year and £18m for the 2001-2002 year. The council's managing director Max Caller, who had started the job that June, Urgent budget cuts were approved on 6 November 2000 and involved cutting back on temporary staff and
overtime and car allowances. Expected savings of £27m that had been forecast for the year did not appear, exacerbating the situation. The
Chartered Institute of Public Finance and Accountancy said that the notice was "not surprising" due to general financial strain upon local government, budget pressures from Northamptonshire's education sector and its growing elderly population, and the county's 'transformation programme' which depleted savings reserves.
Second notice In July 2018, the council issued a second section 114 notice after a projected budget deficit of between £60m and £70m for the 2018/19 financial year was uncovered. Mark McLaughlin, the council's outgoing finance officer, said that the council had "no financial resilience".
Croydon London Borough Council, 2020 and 2022 First notice Croydon London Borough Council issued a section 114 notice on 11 November 2020. It was reported that the council looked like it would overspend by £60m by the end of the year and that it had debts of £1.5bn. The notice had been drafted in early September 2020 but had not been formally issued due to ongoing conversations with the
Ministry for Housing, Communities, and Local Government over a possible solution. Croydon's
finance director Lisa Taylor had warned in August 2020 that it could not be guaranteed that the council would avoid bankruptcy. In October 2020,
Secretary of State Robert Jenrick had launched a review into the council's finances, saying the situation was "deeply concerning". The council's CEO Jo Negrini had resigned in August and the council's leader Tony Newman, deputy leader Alison Butler and its cabinet member for finance Simon Hall had all resigned in October. Croydon's
external auditors
Grant Thornton had highlighted the council's "deteriorating financial resilience" due to increased costs of
adult and children's social care and low levels of reserves. Risky investments were also blamed as a cause of the council's financial problems. The council had borrowed £545m to invest in property, including £30m in the Croydon Park Hotel and £46m on the
Colonnades retail park. Both the hotel and the retail park were forced to close due to
COVID-19 pandemic restrictions which reduced the income the council received from them and the Croydon Park Hotel fell into administration in June 2020. Cuts were expected for the borough's 13 libraries and nine children's centres and 35 buildings owned by the council were to be shut or sold off.
Third notice After the
2022 council election, the council moved to
no overall control being led by new
Mayor of Croydon Jason Perry. The council issued a third notice on 22 November 2022 due to a projected £130m budget deficit. In February 2023, Croydon was given permission by central government to increase
council tax by 15%, 10 percentage points over the normal raise cap of 5%. In March 2023, it was announced that the
Department for Levelling Up, Housing and Communities was proposing intervention to put the council into
special measures. The intervention did not mean that government commissioners would take over the day-to-day running of the council; instead, management decisions would be subject to strict oversight from a government appointed panel. The Written Statement accompanying the directions cited the discovery of significant additional historic issues as the reason for moving the intervention to a statutory footing.
Woking Borough Council, 2023 In May 2023, a government review revealed that the
Woking Borough Council would have debts of £2.4 billion by 2026, 100 times the size of its annual £24 million budget, including investments in hotels and residential skyscrapers, and a £6.4 million loan to a local private school. Risky property deals were attempts to offset the impact of
UK Government funding cuts. The Minister for Local Government
Lee Rowley announced that the council was to be overseen by a team of expert commissioners until the council could "address their commercial and financial challenges, and make transformative change across its entire operations." On 7 June 2023, Woking Council issued a section 114 notice after forecasting a deficit of £1.2 billion for the year ending 31 March 2024 due to losses on risky investments involving hotels and skyscrapers instigated by a former Conservative administration.
Birmingham City Council, 2023 Birmingham City Council issued a section 114 notice on 5 September 2023 due to a budget deficit "in the region of" £87 million, forecast to rise to £164.8 million in the 2024/25 financial year. An external audit statement made by
Grant Thornton on 6 September said that revelations that would "significantly increase" the council's equal pay liabilities meant that its 2020/21 and 2021/22 accounts were "materially misstated". The auditors said the equal pay claim was "one of the most significant challenges that any Council in England has ever faced".
Anushka Asthana reported that the council had been effectively operating under section 114 spending controls for two months before the notice was officially issued. On 17 September,
The Sunday Times reported that housing secretary
Michael Gove was to appoint commissioners to take over running Birmingham City Council who would make recommendations on what assets needed to be sold to balance the council's finances. A government source was reported to have said that the "scale of mismanagement" was "much worse than we thought".
Responses Conservative The Prime Minister's spokesperson acknowledged that the notice would be "concerning" for residents but said that the government had "stepped in to provide support" pointing to an additional £5.1 billion it had provided to councils for the 2023/2024 financial year and adding that "it's for locally elected councils to manage their own budgets". The council had previously described its 2022 financial plans as a "bold budget" that would "maximise the potential of a golden decade for the city"; following the section 114 notice, Robert Alden, the Conservative opposition leader on the council, accused the administration of "lying to the people of Birmingham" and calling the idea of a 'golden decade' "
fools' gold". Street said that
the region's combined authority may have to step in to fund certain projects if Birmingham City Council could no longer afford them.
Labour Labour leader
Keir Starmer told
BBC Breakfast that "[taking] a step back from Birmingham, you'll see there are versions of this across the country and that is because for 13 years local authorities have been stripped of the funding they need". Cotton had been on a family holiday abroad when the section 114 notice was issued but said that he had had "no prior notice" of it and that he took "immediate steps to grip the situation".
Sharon Graham, the general secretary of
the Unite union, said that council workers "must not pay the price" for the council's "incompetence and financial mismanagement".
BBC News reported that residents were worried about cuts in youth services leading to rising crime, increases in
business rates, Organisers of the city's
Christmas Market announced that the market would be held and that an agreement for it to continue up to 2027 would remain in place. With Birmingham set to host the
2026 European Athletics Championships, the
European Athletic Association said it had confidence in the council's ability to hold the championships and was "actively assessing" the situation. When bidding for the competition, the council had agreed to underwrite contributions of £13.7 million to fund the event. Tony Hadley, the chair of
Birchfield Harriers, said that the three years until the competition were "a long time in sport, ... [and] a long time in politics" and that the council should be given time to sort out their finances. On 28 September,
Historic England published a joint letter with
Arts Council England and the
National Lottery Heritage Fund calling on Birmingham's commissioners to ensure the city's heritage and culture is "protected and prioritised" and that "Birmingham's financial reconstruction must not come at the cost of its priceless heritage".
Draft budget In February 2024, the council published its budget proposals for 2024/2025 and 2025/2026. The government commissioners said the budget was "deliverable", but that "the real work of delivery needs to take place with discipline and pace" and that "[t]here are no other choices available". Proposals in the budget included: • Writing off the entire of the 2023/2024 savings plan as undeliverable. • Requesting 'Exceptional Financial Support' funding from the government totalling £225.9 million. The government permitted Birmingham City Council to raise its council tax by up to 10%, above the normal 5% limit, despite having expressed concern about "the significant financial mismanagement at the council".
Responses to budget Over 100 doctors in Birmingham signed an open letter to the council warning that the £51 million cut to children's services would put the "ability to keep our children safe and well" at risk. The total defunding of arts and cultural organisations was criticised by
Nick Rhodes and
Roger Taylor from
Duran Duran, director of the Birmingham Royal Ballet
Carlos Acosta, artist
Pogus Caesar, and comedian
Joe Lycett.
Nottingham City Council, 2023 Nottingham City Council issued a section 114 notice on 29 November 2023, saying it was on track for a £23 million overspend for the 2023-24 financial year. In a statement, the council said that the budget gap was down to social care cost, rising homelessness and the impact of inflation. The council noted that "past issues relating to financial governance [...] and an overspend in the last financial year" had affected its financial resilience. A report earlier in November had shown the council to be considering issuing a notice with council leader David Mellen saying that £21 million of the excess spending was on social care and tackling homelessness. Mellen had said that councils not being funded properly was the main reason for Nottingham's financial problems and that mistakes such as the defunct
Robin Hood Energy firm were "small in comparison" to funding cuts, Financial problems were expected to persist for several years; the council had estimated a gross budget deficit of £50.903 million for the 2024-25 financial year by July 2023 which, even with initial cost-cutting measures being put in place and council tax being increased by the maximum 4.99%, would leave a funding gap of £16.213 million. By December 2023, this expected funding gap had increased to £33.215 million.
Responses Robert Jenrick, government minister and MP for
Newark, said that Labour had shown themselves to be "utterly unfit" to govern Nottingham and called on the government to appoint commissioners to take over financial decision making. The organisation said that while the government was "quick to point the finger at 'failing councils'", in reality the system was broken and more secure local council funding was needed. == Warnings ==