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Many councils enforcing rental regulations face ‘effective bankruptcy’

A survey of local authorities in some of the poorest areas of the country - bodies which enforce many private rental sector regulations - suggests many are considering declaring “effective bankruptcy”.

This follows the news that Birmingham council, the largest local authority in Europe, is already effectively bankrupt.

A survey of 47 local authorities in the Midlands, the North of England and on the South Coast revealed a severe strain on finances - particularly acute in 26 of the councils.


The survey was conducted by the Special Interest Group of Municipal Authorities (Sigoma) which says that some member councils were considering issuing a section 114 notice, which freezes all non-essential spending.

Councils said the most common cause of financial pressures was demand for children's social care services following requests from the government to treat those services as an equal priority with adult social care, and allocate additional funding. Other significant factors cited were inflation costs and wage rises, with warnings an imminent increase in the cost of borrowing is set to add further financial pressure.

S114 notices have been used only rarely in the past - by Hackney council in London 2000 and Northamptonshire County Council in 2018, but more recently by Thurrock, Woking, Croydon and Slough authorities.

The news of possible bankruptcy comes just as Trading Standards in many local councils are being expected to beef up their enforcement. 

Sigoma chairperson Sir Stephen Houghton, Labour leader of Barnsley council, says: "The government needs to recognise the significant inflationary pressures that local authorities have had to deal with in the last 12 months.

"At the same time as inflationary pressure, councils are facing increasing demand for services, particularly in the care sector. Pay increases are putting substantial pressure on budgets, and so the government must ensure that local authorities have the additional funding they need to fully fund these pay increases or risk impacting future service delivery.

"The funding system is completely broken. Councils have worked miracles for the past 13 years, but there is nothing left."

  • Billy the Fish

    Great work Govt. Yet another essential sector/service to the population being destroyed in your 13 year term.

    If we change focus from ourselves to the the community and nature no-one would vote for this bunch of self-serving muppets again. If you are worried about the state of the country in both senses everything else is secondary. No economy without ecology...

    • A W
    • 06 September 2023 09:17 AM

    I think you fail to understand how an economy works... money does not, in fact grow on trees.

  • icon

    Just be glad you don’t live in Scotland under the draconian socialist SNP regime!
    Be glad with what you’ve got down there. Honest!

  • icon

    Some of the councils as I understand are investing in being developers buying up land and buildings under companies which the council set up to do so and my understanding is the directors are counsellors?? Has anyone discovered this is the case in their council?
    How can a body financed by the tax payers create private companies and compete with experienced developers? Again one such council overpaid for a large building and took 5 yrs to complete 3 yrs over run. They also removed balconies out side space which professionally developers are pressurised to provide. Perhaps that explains some bankruptcy within councils.

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    If a forensic audit was carried out on any council regardless of which party is in charge they would find so much evidence of waste it would be disgraceful. Everyone apart from the people who work within councils how wasteful , lazy and useless they are. You can look with your own eyes just at the road network to see wanton waste. If that’s repeated in the other departments then it really is the end of the line for Britain.


    Woking, about 20 miles from where I live, has spent millions on new housing, building mini skyscrapers throughout the town and matching it with updated shopping malls, leisure centres and activities for young people and a better infrastructure. The downside is that with rising prices of materials and wages plus some grandiose plans, the budget has been blown out of the water and things came to a juddering halt.
    Half finished enterprises and contractors baying for their costs to be paid, meant that Woking was staring into a black hole long ago.

  • icon

    Hahaha 😝


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