The local authority responsible for the second largest city in the UK, Birmingham City Council, has issued a Section 114 Notice under the Local Government Finance Act 1988, meaning money can only be spent on essential services.
Europe’s largest local authority say they have seen Government funding cuts of more than £1 billion since the Conservative Party came to power in 2010.
Impact of cuts to IW funding
Although a much smaller local authority, the Isle of Wight has not been immune to funding cuts either, having seen more than £93m lost in the last 12 years.
This year the Isle of Wight council (IWC) need to fill a £4m budget gap and over the coming two years, it’s predicted they’ll need to make almost another £9m in cuts to services.
And still no sign of the promised Island Deal.
LGIU: A sobering moment
Speaking to the news about Birmingham City Council, Jonathan Carr-West, Chief Executive of Local Government Information Unit (LGIU), said,
“To see the largest local authority in the country effectively declare bankruptcy is a sobering moment. Questions will no doubt be asked about decision making and governance in Birmingham. But questions should also be asked about an inconsistent, fragmented and short-term funding system that is driving dozens of councils across the country to financial ruin.
“LGIU has been supporting councils for 40 years, but our members tell us that they are experiencing the most acute crisis they can remember. Not only has the amount of funding been slashed by government but councils have been made to rely on short term, piecemeal funding that inhibits effective financial management.
“Central government has kept councils living from hand to mouth and from year to year for far too long. Birmingham is the biggest council to fail so far, but unless something changes, it won’t be the last.”
