Southampton City Council says it faces 'bankruptcy' without bailout

Council leader Lorna Fielker said she hoped to avoid a "fire sale" of council buildings

A city council has said it will have to effectively declare bankruptcy if its application for emergency government help is refused.

Southampton City Council said it had ended efforts to meet a £39m budget shortfall for 2024-25 on its own.

The Labour-controlled authority said it hoped the government would grant "exceptional financial support" status shortly, enabling buildings to be sold.

Council leader Lorna Fielker said she was determined to avoid a "fire sale".

The authority applied to the government in January for exceptional money-raising powers, which can sometimes involve setting a higher council tax, borrowing or selling assets.

However, it said it intended to restrict the next council tax rise to 5% in line with other authorities and did not wish to increase borrowing.

It said a £7.6m overspend in 2023-24 would be met from its reserves.

The council has increased tolls on the Itchen Bridge

Councillor Fielker said the council was "at the end of the road" in finding ways to balance the books in future years.

She said: "Rising demand for services but also rising costs mean we cannot issue a balanced budget without government intervention."

Previously the council said it would raise money by charging council tax premiums on second homes as well as premiums on more empty properties, closing its last care home and increasing tolls on the Itchen Bridge.

The authority said it would issue a Section 114 notice, effectively declaring bankruptcy, if the government refused its application for support in 2024-25.

Councillor Dan Fitzhenry, from the Conservative group, said: "Labour have taken the council to the brink of bankruptcy, now needing a £40m+ bailout from government to balance the books.

"Council tax is up 4.99 %, council housing rents up 7.7%, parking charges, Itchen Bridge toll fees and care charges have all been increased as well.

"Labour are also going to need to sell council assets such as car parks, community centres and office buildings."

Follow BBC South on Facebook, X, or Instagram. Send your story ideas to [e-mail].