Doncaster Council in “difficult and volatile” financial situation but not at risk of bankruptcy

During a meeting of full council on Thursday (21 September), cabinet member for Finance, Traded Services and Planning Phil Cole addressed colleagues to give an update on the authority’s financial situation.

It comes after five local authorities recently issued Section 114 notices.

A Section 114 notice means that a council cannot make any new spending commitments whatsoever and must revise their current budgets.

Coun. Cole assured colleagues that a Section 114 notice would not be in the council’s near future, however warned of increasing pressures ahead.

Councillor Phil Cole said:

“Doncaster is a member of SIGOMA, a group of 47 urban authorities. SIGOMAreported that one in five of its members are likely to face this situation within the next year.

“You may ask what has led so many councils of differing political colours to be so close to bankruptcy? The answer lies in three parts:

“Core government funding – As has been reported during our Budget process, Doncaster Council has seen its core Government funding reduce by 27% in real terms [since 2010/11]. That is the equivalent of £340 less per resident.

“The second is the impact of inflation, energy prices and pay, which the LGAestimates will add £2.4billion to be found from local council budgets in this financial year.

“Finally, the pressure to support our most vulnerable residents is ever growing. Overspends on both adults and children’s social care costs, which significantly exceed budgets demonstrate the challenge we face. At the end of quarter, 1 we have an estimated £4.16m overspend forecast for this year’s budget.

“I have to advise council that we face very tough choices, includingpossible cuts to other services, to prioritise our vital front-line services.

“Under the leadership of Mayor Ros Jones, City of Doncaster Council remains a financially well-managed local council, delivering important services and providing value for money to residents.

“Based on current projections, I am pleased to say that we do not envisage issuing a Section 114 notice in the foreseeable future.

“However, I cannot stress to members, the difficult and volatile financial position this council, and local government generally is facing.”