RBWM has asked the Government (MHCLG) to allow a council tax rise of 24.99% – an additional 20% above the usual cap. This is unprecedented, and I believe itโs unlikely to be approved because the government have said they do not want to increase tax for working people.
Many of you have been asking me what this means for the residents of RBWM as we are being told that if this rise is not agreed we will be facing a section 114 notice (bankruptcy – see below). This is my considered opinion, gathering together all the facts that I know to date and from speaking to a councillor from a different authority who are currently in S114.
๐ช๐ต๐ฎ๐ ๐ช๐ผ๐๐น๐ฑ ๐๐ฎ๐ฝ๐ฝ๐ฒ๐ป ๐๐ณ ๐ฅ๐๐ช๐ ๐๐๐๐๐ฒ๐ฑ ๐ฎ ๐ฆ๐ฒ๐ฐ๐๐ถ๐ผ๐ป ๐ญ๐ญ๐ฐ ๐ก๐ผ๐๐ถ๐ฐ๐ฒ?A Section 114 (S114) notice is issued when a council can no longer balance its budget, forcing drastic action to recover. Itโs not bankruptcy, but it does mean significant changes. Hereโs what it would mean for RBWM and our community:
๐๐ฒ๐ฐ๐น๐ฎ๐ฟ๐ฎ๐๐ถ๐ผ๐ป ๐ผ๐ณ ๐๐ถ๐ป๐ฎ๐ป๐ฐ๐ถ๐ฎ๐น ๐๐ฟ๐ถ๐๐ถ๐Issued by the councilโs Chief Finance Officer, a S114 notice is a formal statement that the council cannot meet its legal obligation to balance its budget.
๐ฆ๐ฝ๐ฒ๐ป๐ฑ๐ถ๐ป๐ด ๐๐ฟ๐ฒ๐ฒ๐๐ฒNon-essential spending stops immediately. Only essential or legally required services will continue.
๐ก๐ผ๐ ๐๐ฎ๐ป๐ธ๐ฟ๐๐ฝ๐๐ฐ๐A S114 notice isnโt like corporate bankruptcy. Councils donโt close or dissolve, but must take urgent steps to fix their finances.
๐๐ผ๐๐ฒ๐ฟ๐ป๐บ๐ฒ๐ป๐ ๐ข๐๐ฒ๐ฟ๐๐ถ๐ด๐ต๐In severe cases, Government-appointed commissioners may oversee council operations to ensure a recovery plan is implemented.
๐๐ฒ๐ฏ๐ ๐ฅ๐ฒ๐บ๐ฎ๐ถ๐ป๐A S114 notice doesnโt erase debt. The council must still repay what it owes – often by selling assets (buildings and land etc), cutting services, or increasing taxes.
๐ช๐ต๐ฎ๐ ๐๐ต๐ฎ๐ป๐ด๐ฒ๐ ๐๐ผ๐๐น๐ฑ ๐๐ฎ๐ฝ๐ฝ๐ฒ๐ป ๐ถ๐ป ๐ฅ๐๐ช๐ ?
All or some of the following could happen:
๐๐๐๐ ๐๐ผ ๐ฆ๐ฒ๐ฟ๐๐ถ๐ฐ๐ฒ๐Vital but non-statutory services like libraries, street cleaning, and community projects could be scaled back or cut entirely.
๐ก๐ผ ๐๐ฎ๐ฝ๐ถ๐๐ฎ๐น ๐ฆ๐ฝ๐ฒ๐ป๐ฑ๐ถ๐ป๐ดAll capital projects would be paused unless funded by external sources or asset sales.
๐ฆ๐๐ฎ๐ณ๐ณ ๐ฅ๐ฒ๐ฑ๐๐ฐ๐๐ถ๐ผ๐ป๐Resources are likely to be scaled back or cut as part of any recovery plan.
๐๐ฒ๐๐ฒ๐น๐ผ๐ฝ๐บ๐ฒ๐ป๐ ๐๐ผ๐ฐ๐๐Expect more developments in the borough to increase council tax revenue and developer contributions.
๐๐ผ๐๐ป๐ฐ๐ถ๐น๐น๐ผ๐ฟ๐โ ๐ฅ๐ผ๐น๐ฒ
๐ช๐ฒ ๐๐ผ๐ป๐๐ถ๐ป๐๐ฒ ๐ช๐ผ๐ฟ๐ธ๐ถ๐ป๐ดEven under S114, councillors continue to meet, vote, and represent you. The focus shifts to working within tighter constraints to recover the councilโs finances while protecting essential services as much as possible.
๐๐ผ๐๐ป๐ฐ๐ถ๐น ๐ง๐ฎ๐
๐ฎ๐ป๐ฑ ๐ช๐ต๐ฎ๐โ๐ ๐ก๐ฒ๐
๐
๐ข๐ป๐น๐ ๐ข๐ป๐ฒ-๐ฌ๐ฒ๐ฎ๐ฟ ๐ฃ๐น๐ฎ๐ปThe council has only submitted a one year plan due to the government looking to reform local government from 26/27. I assume this is a short term solution to help RBWM until then.
๐๐น๐๐ฒ๐ฟ๐ป๐ฎ๐๐ถ๐๐ฒ๐?If the 24.99% increase is rejected (as I expect), the only options would be:
Issuing a S114 notice.
Borrowing more money – I am unsure if RBWM has the assets to secure this beyond the ยฃ60m already being requested.
The Government might impose a multi-year settlement due to them saying they will be more flexible with options for struggling councils such as RBWM.๐ช๐ต๐ฒ๐ฟ๐ฒ ๐๐ผ ๐ช๐ฒ ๐ฆ๐๐ฎ๐ป๐ฑ?
Itโs important to understand how we got into this situation, but now the council need to focus on solutions instead of a political blame game, and leave it to a forensic accounting investigation to figure out how we got here.
This isnโt about politics – itโs about doing whatโs right for our community. Iโm here to listen, represent you, and work towards practical solutions that will help us move forward together. 
I will continue to put people before politics and always putting the borough first #PeopleBeforePolitics #TBFI