Stark warning over borough council's future finance as it plans 4.99 per cent council tax rise

Councillor Nathan England, the authority's cabinet member for finance, said that nationally 20 per cent of councils are predicting issuing a Section 114 notice within the next two years due to a £4billion funding gap.

A Section 114 notice is issued by a council’s chief financial officer if the organisation is unable to meet its expenditure commitments from its income – effectively declaring bankruptcy.

“Central government must address their underfunding of local government and come up with solutions to fix a social care crisis before many more councils end up being issued with a Section 114 notice,” said Councillor England.

The council was given a one-year provisional funding settlement for the next financial year as part of UK Government’s Autumn Statement, and the authority said it is unsure how much it will receive in future years.

Council leader Shaun Davies said that Telford & Wrekin Council ‘will not’ be one of the councils issuing a Section 114 notice in the next two years.

But, he had this message for constituents: “I want to level with residents in Telford and Wrekin, which is that we are amongst the councils that in three or four years' time, that if nothing changes, will be in a situation where we have to issue Section 114 notices.

“The situation is dire and the reality is that something will give over the next couple of years.”

Since 2019 the council has made £156.9m in annual savings which the council says equates to £1,900 per annum for every household in the borough.

The council is proposing a council tax increase of 4.99 per cent during the next financial year and proposes making £11.1m in further savings.

The proposed council tax increase is intended to contribute £4.04million towards the £13.5m additional investment in adult and children’s social care.

Councillor Paul Watling, cabinet member for adult social care, said that central government had put the issue of adult social care ‘once again’ onto local government.

“Until we have a clear vision from central government on how we’re going to deal with this crisis, they leave us in a difficult situation,” said Councillor Watling.

“We’ve done everything we can do to ensure we get the best deals for people in Telford & Wrekin.”

Councillor Bill Tomlinson added that despite the number of people needing social care rising and the cost for care packages expected to rise to match a 10 per cent minimum pay increase, there was no additional funding from central government.

“We’re having to find funds by either streamlining or re-inventing ourselves on a daily basis to cover this cost,” said Councillor Tomlinson.

“It’s really hard to find that funding. Inevitably certain services might have to be streamlined or cut, but we’re doing the best we can.”

Councillor Davies added that the cost to the council of children in care placements was £4.967million up on what was anticipated.

He said that this came at the same time that children's residential providers made a ‘record’ £300m worth of profits.

“It is an absolute scandal that a collection of private equity companies can make £300m in profit and local authorities are paying up to £250,000 a year for a child placement,” Councillor Davies added.

The council leader added that in adult social care long-term care, purchasing was up almost £10m.

“That is the point where the NHS failures, their backlog in waiting lists, mean that people who used to get care in 18 weeks are now waiting 18 months for care,” he said.

“Those residents then turn to the council for support with social care packages. Something has to give and what has to give is the recognition from the Government that funding has to follow the demand for services.

“Or there has to be a fundamental conversation in this country about whether councils are the right people to be providing social care to children and adults any longer.”