Council needs 'exceptional' financial support

Middlesbrough Council's financial position has been blamed on "past failures".

Middlesbrough Council needs emergency financial help if it is to avoid bankruptcy, leaders have been warned.

A stark report to the authority's executive said a request for exceptional support must be made to the government this month.

If sufficient support is not requested or received, the report said, a section 114 notice will be issued - rendering the council effectively bankrupt.

A government spokesman said it is "ready to talk" to any councils concerned about finances.

Asset sales

All councils are legally required to ensure their budget is balanced by March.

Despite proposed cost-cutting measures, Middlesbrough Council faces a £6.3m funding deficit.

A raft of asset sales and other cost-saving measures have already been signed off by the authority, with further cuts totalling £14m currently subject to public consultation.

According to a statement in the council's draft accounts report, the measures - even when considered alongside the government's Local Government Finance Settlement - will not deliver "sufficiently robust and implementable savings plans" in time.

It says an application to the Department for Levelling Up, Housing and Communities (DLUHC) will be necessary to balance the books.

The report to the Executive blames the council's "critical" financial position in part on "past failures" to establish and deliver savings plans and over-reliance on revenue reserves to meet overspending.

According to the Local Democracy Reporting Service, the authority's draft accounts for 2022-23 show reserves were used to support overspends across services, particularly in children's social care.

Secretary of State Michael Gove has blamed "failures of leadership" for councils' financial problems

Middlesbrough was run by an Independent-Conservative administration until May when Labour took power.

Politicians from all sides have blamed each other for the council's on-going financial woes.

Tees Valley Mayor Ben Houchen previously co-wrote a letter to Simon Hoare, Parliamentary Under-Secretary of State for Local Government, requesting commissioners step in and take over control at Middlesbrough Council.

In December, Secretary of State Michael Gove said each of the authorities that have issued section 114 notices have had "failures of leadership, management and governance", with some taking "unmerited" risks.

In the same month, Middlesbrough's mayor Chris Cooke told the executive that issuing a section 114 or accepting an equivalent level of intervention would place the authority in a "much worse place".