Solihull Council leader Councillor Karen Grinsell has insisted the authority is a “long way off” effective bankruptcy, as senior councillors examined the council’s troubled finances ahead of the budget-setting process. The reassurances came during a cabinet meeting held at the Civic Suite on September 17, where the council’s director of resources, Andrew Felton, presented the latest financial position.
The Local Democracy Reporting Service recently reported that there is currently a forecast overspend of £1.4m for the current financial year, which runs until April next year. Mr Felton described the figure as “relatively modest,” but added: “It is still an overspend and in our current financial context there is still an element of concern.”
Spending controls remain in place
Mr Felton said directorates were working “really hard” and that spending controls remained in place to improve the situation. Conservative council leader Karen Grinsell said: “It is good to see we still have got a good grip on our spend and trajectory is going in the right direction.”
Earlier this year, the director warned there was a risk the council would end up needing to seek permission, through Exceptional Financial Support (EFS) from the government, to increase council tax by up to 9.99 per cent in future years. The report to cabinet said: “There is already a significant funding shortfall in both 2027/28 and 2028/29 – clearly, to set a balanced budget for 2027/28 there will need to be difficult decisions.”
“In the event insufficient savings can be identified and agreed, and if EFS is no longer deemed a viable option or is rejected, the Section 151 officer (Mr Felton) would be in the position of having to consider issuing a Section 114 notice.” A Section 114 notice means a council is effectively bankrupt, as it is unable to balance its budget and cannot commit to any new spending.
Asset sale concerns raised
Green Party councillor Max McLoughlin expressed concern about the sale of assets. “Not only is this a one-off thing that can be done,” he said. “Very often you are either losing community assets or the best performing on the balance sheet are the assets that are generating the revenue - we are creating a greater issue in the future.”
Cabinet member councillor Andy Mackiewicz responded: “We are not looking at a firesale. We are retaining assets that are performing well. Assets not performing we are disposing - that’s just good financial management.”
Liberal Democrat councillor Ade Adeyemo said: “There have been louder and louder warnings about what Solihull is about to face. We have a huge shortfall, we have very few options. What we need to know, what do we need to do? If we are going to make cuts, what are we going to cut? If we are going to make savings, where are savings likely to come from?”
Budget decision timeline
The officer replied: “The process we are about to go into is exactly what you have described. Officers have been pulling together a revision of the spending pressures, of the savings options, any other options that might be available to us - to give you the options around potentially how we can balance the budget. Ultimately you have got to decide, because we don’t have a majority council at the moment, how you are going to get to an agreed position. Whether you are taking the controlling group’s budget, whether there are deals done around that. We will provide the options, the issue is whether those options are palatable to you.”
Reform UK councillor Samantha Gethen asked: “If it looks like the budget can’t be balanced and you are having to consider a 144, at what point in the process do you have to do that?” Mr Felton replied: “I might have to do that as we come towards the decision, so in February next year. Unless there is a major issue I don’t have to do it before then.”
Coun Grinsell added: “That’s a very big if - we are a long way off that at this moment in time.”
