Question to the Department for Levelling Up, Housing & Communities:

To ask His Majesty's Government what estimate they have made of the cost of providing advice to English local authorities seeking to avoid bankruptcies in 2023.

Examples of significant financial failure in local government are thankfully rare, however if a council is unable to set or maintain a balanced budget or unlawful expenditure has occurred it may be required to issue a Section 114 (s114) notice.

In 2022, three councils issued s114 notices: the London Borough of Croydon, Northumberland County Council and Woking Borough Council. The London Borough of Croydon issued a first s114 in January 2022 due to unlawful expenditure and a second in November 2022 due to being unable to maintain a balanced budget. Northumberland County Council's s114 notice was issued due to unlawful expenditure and Thurrock Council's was issued due to being unable to maintain a balanced budget.

In 2023, a further three councils issued s114 notices, all due to being unable to set or maintain a balanced budget. These were: Woking Borough Council, Birmingham City Council and Nottingham City Council.

We do not hold an estimate for the cost of providing advice to local authorities seeking to avoid issuing a s114 notice. Issuing a Section 114 notice is a local decision and one that Government has no role in.

The Government monitors the financial health of councils on a regular basis using a range of data as well as through extensive direct engagement. We stand ready to speak to any council that has concerns about its ability to manage its finances or faces pressures it has not planned for.