Council likely to seek further £8m government bailout

The leader of a city council has confirmed the authority will likely be seeking millions of pounds in a government bailout later this year.

Political leaders were briefed in a meeting last week, in which a figure of £8m was expected to be asked for. The council received £15.5m of Exceptional Support Funding (EFL) from the Ministry for Housing Communities and Local Government (MHCLG) in February.

Jeremy Hilton, leader of Gloucester City Council confirmed the news but said he was "deeply disappointed" details of a confidential meeting had been leaked.

He added the council faced "significant challenges" in the coming months and needed "shared commitment" of "working together".

The Liberal Democrat-led local authority, which was Conservative-run for two decades until the May 2024 local elections, effectively went bankrupt after it was revealed the council had overestimated how much money it had.

Accounts were done by hand and not ordered for a number of years, after a cyber attack crippled the council's systems in 2021.

Higher interest rates and poor investment return on assets were also blamed.

What an additional bailout would be needed for is not clear, but the city council said it had indicated more support might be needed.

Leader of the Conservative Group, Stephanie Chambers, described the news as "devastating".

"We have pushed and pushed for forensic accountants to be bought in because we don't feel we've been told everything," she added.

On top of the bailout, the council also needs to find £1m of savings in their budget for next year.

Leader of the Labour Group, Terry Pullen, questioned why the council needed another £8m after receiving £15.5m in February.

"I was told that was adequate to solve the council's financial problems," Pullen added.

A Gloucester City Council spokesperson said: "We have not made a submission to MHCLG for further EFS (exceptional financial support) funding at this point."

The Chartered Institute of Public Finance and Accountancy (CIPFA) Assurance Report was published in August, in response to the council's financial position.

It was carried out on behalf of the Ministry for Housing Communities and Local Government and found that while more work needed to be done, significant progress had been made.

Budget monitoring, restructuring the finance team and scaling back some of their ambitions in the corporate plan, due to financial restraints, had improved.

However, the council needed to build trust between political groups in order to help bring financial stability to the council, it said.

Leader of the Independent Group, Alastair Chambers, said he had submitted a vote of no confidence in the council leader.

"If you have got a business which is going wrong, the liquidators need to come in and clear up the mess and I think that needs to happen with Gloucester," he said.

Chambers added the council needed "fresh eyes" on what was going on.

Council leader Hilton said they were "committed to openness and transparency" but the £8m figure "could change significantly."

Hilton said he wanted to work with other political groups to find a solution but leaks of confidential meetings made that difficult.

"The unauthorised disclosure of confidential discussions risks undermining that process and may make it harder to share sensitive information openly in future," Hilton said.

The council leader added some politicians were more interested in "bashing" him "and the council" than finding a solution.

"At this stage, my focus is not on political point-scoring but on identifying practical solutions," Hilton said.

He added he would "welcome contributions from all political groups" on how to make savings next year.

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