Cancelling Doncaster Sheffield Airport loan could lead to increased 'bankruptcy' risk for Council, papers say

The City of Doncaster Council faces an increased risk of bankruptcy if the £57million loan for Doncaster Sheffield Airport (DSA) is rescinded with no alternative funding available, papers have revealed.

DSA faces a crunch vote in the council chamber on May 11, 2026, as Reform UK have proposed rescinding the loan supporting the airport’s reopening.

Agenda papers for the meeting, intended to allow members to make a fully informed decision on the loan, state alternative funding will be required to both continue the reopening, or pay for the costs of ending it, if the loan is rescinded.

If that alternative funding is not available there is an increased risk that Doncaster Council’s chief financial officer, Faye Tyas, would need to “consider statutory duties under section 114 of the Local Government Finance Act 1988”.

Section 114s are triggered by local authorities to, in effect, declare themselves bankrupt.

Quantified costs of closing the airport are currently expected to be more than £48m, the report states. This is not including potential costs to end contracts connected to the airport and pay redundancy costs of dozens of staff already under the employment of Fly Doncaster Ltd, the arms-length company that will operate DSA for the council.

The papers state that the council would need to make “savings”, often including cuts, or take out “additional borrowing… or other budgetary adjustments” in order to fend off bankruptcy.

Immediately after section 114 notices, residents are unlikely to notice many differences in the services they’re being provided. However, council leadership would need to meet and decide how it would reduce its expenditure to come in line with its income.

According to the Institute for Government, this can include spending cuts to services or increasing council tax beyond the maximum normally permitted increase.

These larger council tax increases require special approval from the Government, like in Croydon, which hiked council tax by 15 per cent in 2023/24.

High profile ‘bankruptcies’ in recent years include councils in Birmingham, Nottingham and Woking.

Reform UK has said it has called for the loan to be rescinded because it did not believe councillors were equipped with the necessary information to approve the loan in November 2025.

This came after the leak of the lease between Doncaster Council and the landowners, the Peel Group, in January 2026, which revealed a number of controversial clauses.

These clauses were all entirely legal, but the controversy surrounding them caused political outrage on opposition benches.

Reform UK Doncaster has long said it would prefer DSA to be reopened with private investment, so companies can take on the risks associated.

Doncaster Council will meet on May 11, 2026, for the crunch vote.