By law, councils must have a balanced budget. If a council cannot find a way to finance its budget, it must issue a 'Section 114' notice.
On 19 December 2022, we issued the 'Section 114' notice below. This puts strict limits on what we can spend. It was necessary because we will be unable to balance our budgets for the financial years of 2022/23 and 2023/24.
Taking this action protects essential services and helps to make sure we will be able to balance our budget in future.
What a Section 114 notice means
The Section 114 notice means that, aside from the exceptional reasons listed below, we have to stop all spending and cannot enter into new agreements that will incur a cost. Any proposed new spending must now be reviewed on a case-by-case basis by a formal spending review panel.
We can and will continue spending:
- on existing staff payroll and pension costs
- on goods and services that have already been received
- required to provide of statutory services at a minimum possible level
- urgently needed to safeguard vulnerable citizens
- required through existing legal agreements and contracts
- funded through ring-fenced grants
- required to get value for money or reduce extra in-year costs
We will still pay refunds where we must do so.
Responding to the financial challenge
On 9 January 2023, an Extraordinary meeting of Full Council discussed the Section 114 notice and its implications, along with the council’s response to the financial challenge it faces and proposed actions. Go to Extraordinary meeting of Council, 9 January 2023 – agenda and minutes.
We have asked for exceptional financial support from the Government over a number of years to stabilise our financial position and give us time to have balanced budgets.
Alongside this support we will use asset disposal, efficiency savings, council tax increases and funding flexibilities from the Government.
We are already reducing non-essential spending and are working hard to reduce our overspend.