Now Brighton council warns it is in ‘financial peril’ and will have to cut millions in spending next year – days after Labour-run Nottingham City Council declares itself ‘bankrupt’

• Brighton & Hove City Council leader said the authority has a £31m budget gap 
• Nottingham City Council forecast a £57million black hole in its 2023-24 budget
• Labour-run Birmingham City Council issued a Section 114 notice in September

Brighton Council has warned it is in ‘financial peril’ and will have to cut millions of pounds in spending next year to balance its books – after Nottingham City Council declared itself ‘bankrupt’.

Brighton and Hove City Council leader Bella Sankey said the authority has a £31 million budget gap to meet for next year after the government’s autumn statement fell ‘disastrously short’ on meeting inflation costs and rising demand for services.

Ms Sankey said: ‘The council’s finances are in an extremely perilous position. 

‘There was absolutely nothing in the autumn statement to provide relief for this council or local authorities who have faced a decade of heartless central government austerity, or any real-world financial help for struggling families.

‘Demand for our services is increasing, especially in key areas like adult social care, children with special educational needs and disabilities (SEND) and homelessness, which is putting pressure on other services.’

Brighton and Hove City Council leader Bella Sankey said the authority has a £31 million budget gap to meet for next year. Pictured: Brighton and Hove City Council 

This comes as Nottingham City Council (pictured) became the latest authority to issue a Section 114 notice, effectively declaring bankruptcy on Wednesday

She said a government fund which allows the council to help struggling households pay for food, energy and other essential costs is being cut.

The Labour council leader added: ‘We’re being forced to look at every one of the 400 services we provide and start the extremely difficult process of deciding what are priority services and what aren’t.

READ MORE: Labour-run Nottingham City Council declares itself ‘bankrupt’ after revealing more than £23m overspend in just one year

‘To put it bluntly, the less money we have the less services we can provide.’ 

This comes as Nottingham City Council became the latest authority to issue a Section 114 notice, effectively declaring bankruptcy on Wednesday. 

It blamed its financial problems on government funding and rising demand for services.

Nottingham City Council forecast a £57million black hole in its 2023-24 budget, which was ‘partly mitigated’ by dipping into the reserves, reducing its spend by more than half to £23million, a report revealed.

Council finance boss Ross Brown issued a section 114 notice after raising his fears that the council will not be able to deliver a balanced budget for this year, as legally required to do.

Nottingham is believed to be the third authority to issue a Section 114 notice this year, with a total of 12 such reports made since 2018.  

Labour-run Birmingham City Council issued a Section 114 notice in September, after admitting it had an estimated £760 million equal pay liability, and identified a budget shortfall for the current financial year of £87 million.

Ms Sankey said the council is not in this position yet, but is in financial peril.

Labour-run Birmingham City Council (pictured) issued a Section 114 notice in September, after admitting it had an estimated £760 million equal pay liability

The east Sussex council chief added: ‘While we await the final detail on the local government settlement, we will almost certainly have to find millions more savings next year than planned because the government has chosen to ignore the crisis in local government funding.

‘I want to reassure all of our residents we are doing everything we can to make service improvements while balancing the council’s budget, which is a legal requirement.’

A staff hiring freeze at the council and finding savings within this year are among some of the measures trying to keep the authority’s finances afloat.

The Department for Levelling Up, Housing and Communities has been contacted for comment.

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