Kirklees Council chief financial officer assures councillors it won't go bankrupt this year

Kirklees Council says it is "not going to go bust this year"
Huddersfield Town Hall Credit: LDRS

Kirklees Council is "confident" it will not go bust this year as it fights to balance the books and fill a £47m deficit in its budget.

The bullish comment comes as the authority continues to slash services.

Kirklees wants to avoid following other councils - such as Croydon, Northampton, and Birmingham - in issuing a Section 114 notice, which is what happens when a council’s expenditure looks set to exceed the resources it has available in a financial year.

Senior councillor Graham Turner, the Cabinet member for finance and regeneration, said it would be an "absolute disaster" for residents if one was issued.

He acknowledged that while the council was "not where it wants to be" in terms of the cuts and "painful" decisions that are being made, the authority is "committed" to delivering a balanced budget. 

He was speaking after a presentation by chief financial officer Isabel Brittain who said the financial position was looking up.

She was asked by Green Party group leader Cllr Andrew Cooper whether the council has done enough to avoid declaring itself effectively bankrupt.

"We won’t be issuing a Section 114 notice," said Ms Brittain. "We are doing a lot of work behind the scenes to reduce that spend.

"Obviously we have plans in place and this is the position as of the end of September.

“The team and myself are trying to control non-essential spends, we’re holding vacancies open and at this point in time, we are very positive that we will end this year in a better position than we are at the moment."

Cllr Turner added: "Isabel was quite right there: we are not going to go into Section 114. We will do absolutely everything within our power to make sure we don’t because that would be the absolute worst outcome for this local authority and its residents. 

"We will deliver a balanced budget in March to ensure that we don’t go into Section 114 territory.

"It’s not the case for many other local authorities but we will not reach that point – we are confident of that."

Labour-run Kirklees Council has unveiled a raft of cost-cutting measures in recent months including selling off buildings, closing leisure centres and dementia care homes, putting up the price of car parks across the borough, and announcing hundreds of staff redundancies.

It is also proposing to put up council housing rents by 7.7% next year.

Leisure centres across the borough are among the assets under threat from council cuts to save £47m.

Reacting to the latest announcement, opposition groups were unconvinced.

Cllr Cooper said: "The council still has millions of pounds worth of savings to make so I wanted to know, having gone through all that pain, whether the council would be declaring itself bankrupt or not.

"Labour has said that we will not be issuing a Section 114 notice. In itself that is good news but we need to see what the impact on local people will be of achieving their spending targets."

Cllr John Lawson, leader of the Lib Dems in Kirklees, said: "While it’s positive to hear that we are still projected to have a balanced budget next year, the tougher challenges in the following year still remain with tens of millions in savings yet to be identified.

"The safety net of reserves will be less and less reliable in future so the burden will fall inevitably on services."

Cllr John Taylor, the deputy leader of the Conservative group, said the Council was "virtually financially bankrupt but also bankrupt of ideas."

"The council is not out of financial trouble and it does not yet have a plan on how it will recover from its near bankruptcy," he said.

"Labour’s legacy of financial mismanagement and short-term planning is something that will act as a drag on Kirklees' prosperity into the future."

Want a quick and expert briefing on the biggest news stories? Listen to our latest podcasts to find out What You Need To Know...