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Bankrupt council ?

Community Veteran
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Registered: 02-08-2007

Bankrupt council ?

Our local council is claiming that if it does not get extra money from the government along with reducing services and making staff redundant it will go bankrupt.
Could a council go bankrupt ? If it did what would happen as it has a statutory duty to provide services ? Has any council ever gone bankrupt ?  Anyone any ideas about this ?
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Community Veteran
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Registered: 01-08-2007

Re: Bankrupt council ?

Yes councils can go bankrupt. They have income and expenditure just like anyone else.
It's rare but it does happen. Typically to avoid it they take the town hostage - putting up parking charges, council tax etc. At the moment though they're all finding it tougher to do this without screwing things up even more. In the boom times parking was the cash cow but they've over milked that and its running dry with more and more people loosing their jobs and others turning to alternative arrangements. It's dried up so much now that some councils are selling off car parks to be built on.
As for what happens basically the government tell them to get their books in order or they'll be taken over forcefully by the government itself who will install its own people to run it. At this point your diplomatically elected leaders and thus your right to vote has been nullified by dictatorship.
I need a new signature... i'm bored of the old one!
Community Veteran
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Registered: 12-08-2007

Re: Bankrupt council ?

@gleneagles, here is what a Devon council was told to do.
Devon Council
Community Veteran
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Registered: 24-09-2008

Re: Bankrupt council ?

As the article suggests. I've often thought smaller adjacent councils should be encouraged/forced to merge and become unitary authorities.  It is happening but very slowly.
It was OK when the refuse collectors (as an example) worked for the council, but since many services have been outsourced (refuse collection for 4 of our local councils are collected by the same company).
Seems odd to have 4 different contracts for refuse collection, 4 lots of ‘environmental hotlines’, 4 lots of accounting processes all duplicating each other.
Yes it creates work, but in this current climate can we afford it? A 39% hike in council tax 'to balance the books', not many folk would stand for that. Undecided
Community Veteran
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Re: Bankrupt council ?

The councillors should take a pay cut to subsistence level, (just above JSA ) until the books DO balance....
After all, it is those same people who took the decisions to get into the financial state they are in.... why should the council tax payers be punished ?
If Camoron and his cronies made that a "law", then the whole of Westminster would be on JSA plus 5p... !
Community Veteran
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Re: Bankrupt council ?

Many Councillors do not get paid!
@journeys, is this your local authority?
Community Veteran
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Re: Bankrupt council ?

No. ours is

Always thought at least 4 of those here could be amalgamated.
dick:quote
Community Veteran
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Registered: 12-08-2007

Re: Bankrupt council ?

A brief look at the accounts.  The chief exec seems a little overpaid on £157k and one or 2 councilors have high expenses but it is difficult to say this without knowing their full responsibilities.  Anyway, trimming these will not solve your problems.
What are the main reasons for the problem in your opinion?
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Re: Bankrupt council ?

Quote from: artmo
What are the main reasons for the problem in your opinion?

Not enough money?  Wink
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Community Veteran
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Registered: 02-08-2007

Re: Bankrupt council ?

Thanks for the feedback on this topic.
As I understand it no council has actually gone bankrupt yet, perhaps it's a matter of time ?
If the government sent in a group to take over the work of a council in the event it went bankrupt I suspect that group would be given additional government funds to sort things out as it would be political suicide for any government to allow an increase of 20% plus to council tax.
Community Veteran
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Re: Bankrupt council ?

Quote from: Sprite
Not enough money?  Wink

Oh dear!!
It could have course be poor budgeting.  Without knowing the full facts it's not possible to tell.