Bankruptcy fears at BCP Council put to bed in football terms

Mike Cox, portfolio holder for finance, said he is “very confident” the authority can avoid bankruptcy with its latest budget proposals. 

Part of the proposals include increasing council tax by 4.99 per cent – the absolute maximum a council can offer without calling a referendum. 

It has also identified £41m of further savings, efficiencies, and additional income generation required to correct the structural £30m deficit inherited from 2023/24.

Cllr Mike Cox

After a year of burning through its reserves, senior officials at the council have had to find more than £50m worth of savings in its budget for 2024/25. 

Cllr Cox said the budget has put the authority in a “far better position” than what it was in before. 

He said: “It’s safe to say that when we came into administration back in May, we were probably in the relegation zone of councils that were due to get a section 114.  

“I think we're now mid table if not heading towards promotion and therefore we've done extremely well.  

“This is not just balancing this year's budget; we've balanced the whole four years which is a really good achievement for a new administration coming in. 

“I am personally very confident that we're going to avoid a 114 notice. Clearly there are risks with any council going forward and we've got a fair number of our own risks but they are manageable.” 

Adam Richens (Image: Daily Echo)

A section 114 notice is essentially bankruptcy of the council and would mean it cannot make any new spending. 

One of the suggestions in the budget plan is to cut all non-essential spending – similar to what a section 114 notice would be. 

Cllr Cox said by stopping all non-essential spending, it would “make sure that our budget is as tight as possible”. 

Adam Richens, BCP Council’s chief of finance, said: “The risk around the delivery of £41m of savings is clearly the most prominent that we currently face, hence the reason for that recommendation being included in the report. 

“But if officers can give members confidence that we've delivered that £41m before April 1 then clearly that recommendation doesn't need to come into force.”