Council finds £1.5m overspend after cyber attack

Gloucester City Council's Liberal Democrats say the authority is in a "perilous" position financially

A city council has found it was £1.5m worse off than previously thought, it has emerged.

Gloucester City Council said it made the discovery after doing its accounts manually following a cyber attack in 2021 which crippled its systems.

As a result the accounts were not audited - which meant "hidden" overspends from 2022-2024 had put them in a "perilous" position.

The Liberal Democrat run council blamed the previous Conservative administration for "mismanagement" whilst the Conservatives said the Liberal Democrats needed to take the responsibility for governing.

'Very vulnerable'

The increased overspends meant the council had had to dip more into its reserves then anticipated.

The reserves were expected to dwindle to £2.8m by March 2026 compared to £4.3m as projected in February's Budget report.

Deputy Leader of the City Council Declan Wilson said: "Our reserves are at a very low level and it could leave us very vulnerable if an emergency situation was to arise again."

Discretionary spending has been halted and Gloucester City Council's apprenticeship programme suspended.

Car parking charges would be increased in November in line with inflation and the business plans for the Guildhall, Gloucester Museum and Blackfriars, were being looked at again.

Finances left 'in chaos'

Council leader Jeremy Hilton laid the blame squarely at the previous administration.

He said: "They failed in their most basic duty to deliver audited accounts and left Gloucester's finances in chaos.

"Their legacy is appalling – half-finished projects, broken promises, and now a multi-million pound hole in the books."

In a statement the Conservative Group on Gloucester City council told the BBC the Liberal Democrats knew about the deficit and blamed the cyber attack for the unaudited accounts.

The group questioned the timing of the announcement and criticised the Liberal Democrats for overinflating how much money they expected to get from the forum.

Stephanie Chambers, leader of the group said: "Instead of taking responsibility, the administration is attempting to shift blame onto the previous leadership, a tactic that has become all too familiar."

The group criticised the Liberal Democrats for hiring more staff and increasing the number of council positions.

'Deeply disappointing'

Terry Pullen leader of the Labour group said it would be calling for an inquiry into how this had happened adding that it had come "completely out of the blue".

Mr Pullen said: "This has happened over recent years, let's be honest, when the Conservatives were running the council.

"Staffing at the council is already cut to the bone and services are already stretched."

The Independents led by Alastair Chambers described the news as "deeply disappointing for the people of Gloucester" and warned of "a very real risk of effective bankruptcy" unless "urgent corrective measures" were taken.

The City Council's cabinet was due to discuss the overspend on 10 September.