Bankruptcy fears at Central Bedfordshire Council dismissed as "speculation" by senior councillor

Labour Dunstable North councillor Matt Brennan raised the ‘b’ word as a requested item at a corporate resources overview and scrutiny committee meeting.

“There are significant red flags that this council, under the current administration, might be on its way to bankruptcy and a section 114 (notice),” he warned.

“My reasoning is as follows:

• local political instability;
• turnover of staff within the council;
• risk management and CBC not following recommendations of the Local Government Association (LGA) peer review;
• alleged poor and inappropriate councillor conduct;
• lack of transparency regarding New Vista Homes and Carers Central;
• the poor quality of the annual governance statement and strategic plan;
• weaknesses in CBC’s audit committee;
• a lack of reserves;
• and going into a budget overspend position for a second year in a row.

“There are several publicly available documents with information about case studies on bankruptcies within local authorities.

“One is by the LGA called ‘Learning from councils which faced finance and governance challenges’. That contains details on how councils can avoid bankruptcy.

“I urge you to take them on board and provide effective challenge to the executive and the council.”

Independent Aspley and Woburn councillor John Baker replied: “You’ve been talking on social media about bankruptcy, but it appears to be your interpretation of something and speculation.

“There’s a currently predicted £1.5m overspend on the (revenue) budget, but for CBC it’s not actually a huge amount. That said, nobody is complacent.

“There are several ways the officers and the chief executive are working to bring that back within the budget. There are detailed monitoring reports with more information and greater effort made to identify areas of weaknesses.

“This shows where challenge can be applied and where more effort is required to tackle overspends. I’m deeply unhappy with the repeated use of the phrase bankruptcy and section 114.

“Members of the council don’t want those things to happen and don’t talk about them. They support officers to ensure we achieve savings. Let’s steer clear of talking down the local authority.”

CBC chief executive Marcel Coiffait referred to the non-delivery of efficiencies, saying: “That’s not why our budget is overspent, as we’re largely delivering those.

“Higher than forecasted demand in adult social care and higher than predicted costs in children’s social care is mainly driving the overspend.

“We’ll consider everything to bring the budget in line. Whether that’s holding vacancies or examining every level of spend as to whether it’s essential or can be delayed.

“There are plenty of things planned. We’re not looking to add unnecessary bureaucracy, but I need to make sure all the 2,700 staff understand the financial challenges we face and take appropriate steps.”

Liberal Democrat Leighton Linslade South councillor Shaun Roberts suggested: “The central concern here is one we all share.

“Less than 18 months ago, our reserves were up towards £100m. At the end of this financial year, it’s going to be a great deal less. That should genuinely concern all members of this council.”