Southampton City Council may seek government loan

Simon Letts
Councillor Simon Letts said Southampton had lost £500m in government funding over about 10 years

A council has said it is likely to ask the government for an emergency loan to deal with a "genuine financial crisis".

Labour-controlled Southampton City Council said it still needed another £15m to balance this year's budget.

Councillor Simon Letts, in charge of finance, announced another 50 job losses on Friday, on top of 100 posts shed so far this year.

Opposition Conservatives said the council had been brought to "near certain bankruptcy".

Tory group leader Dan Fitzhenry said: "Labour... have failed to manage the council's budget.

"They have already raised parking charges, council tax by 5% and proposed to close the restaurants at our extra care homes... telling residents to replace fresh food with microwaves."

In February, the council's chief financial officer told councillors that a so-called Section 114 notice, effectively declaring bankruptcy, was "foreseeable and a major risk" during 2023-24.

Mr Letts said: "I would say at this stage that it is likely. A lot depends on the [government's] financial settlement which we we won't get until Christmas Eve.

"This is a genuine crisis, not just here but in local government across the country.

"Over the last 10 years or so, we've taken about £500m of government reductions.

"I would suggest that maybe 30 to 40 councils similar to Southampton - urban areas with greatest need - are in difficulties in terms of the finances."

He said the council's plans to tackle a £38m shortfall next year included council tax premiums on second homes as well as premiums on more empty properties, the closure of its last care home and toll increases on the Itchen Bridge.

A report to be discussed at a council scrutiny meeting on Wednesday also revealed plans to increase rents and heating bills for council tenants and to raise some charges for adult social care.

Previously the council said it would suspend major projects including the QE2 Mile to Bargate pedestrianisation scheme and Southampton's Green City Fund.

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