Posted tagged ‘insolvency’

Could a council go bust and if it does what should we do?

August 24, 2011

Could a council really go this way?

My managers manager is a fairly senior guy in my local authority. Two months ago he was asked to take 40% out of his budget over the next three years.

In an unguarded moment a few weeks ago he commented that if it transpired that this target was more firm target than aspiration we ‘might as well all pack up and go home.’

This, along with a whole number of other things going on in local government, got me thinking; is it possible that a whole local authority might get in a position where they are so low on resources that they ‘might as well all pack up and go home.’

There are certain things that a council legally has to do and there are functions that have to happen to enable these things to take place. If it becomes impossible to meet these statutory responsibilities within the finances that the council has then in effect it would be bust. I don’t want to be inflammatory but is this possible?

I asked this question on twitter and in response the excellent Alex Khaldi from Impower wrote a blog post entitled: Pop Goes the council? I urge you to check it out as my below summary will doubtless not do it justice.