Councillors consider cuts to plug £7m gap

The Labour-run council's political leadership is exploring options for spending cuts

Coventry City Council is considering making further cuts to some public services after forecasting an overspend of £7m this year.

It has said it is facing budget pressures including rising costs, service demand and income shortfalls.

There is a "significant threat" the funding gap will increase without "further urgent and ongoing action", the council said.

The stark assessment was included in a financial monitoring report published by the local authority, and the BBC has approached it for further comment.

The report does not identify which services may be at risk of spending cuts.

The council’s finance director said no "extraordinary action" was needed at this stage.

But senior councillors have been told they "should be in no doubt that the underlying position for 2024/25 is again incredibly challenging".

"Additionally, without fundamental change in the funding regime for local government, the council will continue to face some difficult choices in respect of 2025/26 and future years," the report added.

In recent years, the Labour-run council has repeatedly warned it is at risk of having to issue a Section 114 notice, effectively declaring that it is bankrupt.

A section 114 is a report issued by a council's finance officer when they believe the local authority's income will not cover its costs for the next year.

Birmingham City Council signed off service cuts worth £300m and a 21% rise in council tax over two years after issuing a section 114 notice in 2023.

Coventry City Council says it is facing significant spending pressures

In Coventry, the city council is attempting to make £8.4m in cuts to services in 2024-25 to help plug a £20m gap in its finances.

The last budget - approved by councillors in February - included a 4.99% rise in council tax, a reduction in overnight street lighting, and a £40-a-year charge for garden waste collection.

In its latest financial monitoring report, the council said it had already taken "a significant number of one-off actions" to reduce the overspend.

The report says "further urgent action" is being assessed to address the pressure to stop the 2025-26 position increasing to "unmanageable levels".

Council officers have been asked to review the "service impact of reducing ongoing spend levels to within budget" and "policy options", among other requests.

The report said these were likely to involve considering cuts that have "previously been viewed as unfavourable".

Those council officers are now expected to model a number of options to reduce the shortfall both this financial year and next.

Although the report does not specify what those are likely to involve, it could see some difficult decisions, particularly on services it is not required to provide by law.

Councils have a legal duty to provide some services - such as social care and housing - but others are discretionary.