Useless Leicester Labour council staves off bankruptcy with ‘painful’ service cuts, big council tax rises and land sales after wasting vast amounts of money because they are, er, useless

Leicester City Council has staved off bankruptcy – for now – with a “painful” three-year plan to keep the authority afloat. The local authority warned last December that its finances were on a “cliff edge” and it would likely have to file a Section 114 (S114) notice within 12 months.

Councils are legally bound to present a balanced budget each year, and must issue a S114 if they cannot, essentially declaring them bankrupt. However, last year’s dire warnings have not yet come to pass.

Publishing its draft budget for next three financial years today (Tuesday, December 10), the city council instead set out proposals to balance the books including tens of millions in service cuts, maximum council tax rises, borrowing and the sale of land and properties.

The authority is hoping that by the end of the 2027/28 financial year, the Government’s local government funding review will be complete, and it will have decided to give more cash to Leicester. The authority has repeatedly insisted that it does not receive a fair level of funding from the Government, especially as it has a relatively high rate of poverty compared to other parts of the country.

However, much of the cash being used by the city to bridge the gap between income and outgoings during the three-year period is “one-off” cash – meaning if the hoped-for funding increase does not materialise, the council is likely to find itself in an even more difficult position at the end of the three-year period.

Announcing the draft budget, city mayor Sir Peter Soulsby said he would “be damned” if he was going to allow the council to go under and file a S114 notice. He added: “What we now face is going to be painful – painful to do, painful for the people who receive council services and painful for the councillors themselves.”

However, he said, the “gamble” of making those difficult decisions now in the hope of receiving more money from the Government in three years’ time was the “reasonable” approach. He said: “The alternative is either to do nothing and go off the cliff edge during this financial year, or to make even more savage cuts so that the budget will balance forever.”....<<<Read More>>>>...