#local-government-finance

#local-government-finance

Birmingham city council was likely never bankrupt and the decision to issue the section 114 notice two years ago was based on unaudited and materially incorrect information, accounting experts have claimed. The Labour-run council issued a section 114 notice in September 2023, in effect declaring itself bankrupt, which triggered a wave of spending cuts and plans to sell 750m worth of assets. This prompted the government to appoint commissioners to run the council for five years.

Back in April, Newham Council got special permission to raise its council tax by 8.99 percent - nearly double the normal increase cap of 4.99 percent - in order to help it swerve bankruptcy. As Newham faces more 'difficult decisions' and a £53 million funding gap next year, a new report suggests that it could ask for permission to increase its council tax by the same amount again.

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