How to Lose Control without an Election

Many local authorities are living in fear of the Section 114 Notice. This is when the Council’s Chief Finance Officer declares that the Council can no longer balance its budget and does not have enough money to meet its spending obligations.

Is this so bad?

Once issued, a Section 114 notice triggers immediate and severe consequences. All non-statutory spending must stop at once. Only spending required by law, such as social care, safeguarding, and waste collection, can continue. Councillors have 21 days to decide what action to take. Major service cuts normally follow and central government intervention becomes likely. It is widely described as the local government equivalent of bankruptcy, because it represents a financial emergency with a loss of autonomy. In recent times, s114 notices have been issued in Birmingham, Woking, Croydon, Slough, and Thurrock. Is Wirral next?

Is this all the Council’s fault?

Wirral’s financial problems are serious, but not unique. The Council has struggled with its budget for a number of years. Exploding service costs in adult social care and children’s services, increasing debt interest and frankly some poor management, have all contributed to this. Many councillors have worked hard to try and mitigate these problems. However, what may, in the end, tip things over the edge is the recently announced 3-year local government finance settlement. A settlement that will see the central government grant to Wirral actually reduce in 2027 and 2028 to below its current level!

Predictable?

Section 114 notices are not freak events. They are the predictable outcome of systemic pressures in local government finance. The simple fact is that the funding system itself is broken. Councils are expected to meet rising statutory demands with shrinking resources. This is no longer only just a legacy of Conservative austerity. The current Labour government now owns the system and is making its own choices to reduce Wirral's central government funding. When a crisis arrives, it crystallises that accountability. Yes, local mistakes may have made some things worse, but failure is now baked into the system and Labour is choosing not to fix it.

What about accountability?

Let’s be absolutely clear, sending in commissioners is not a neutral, technocratic act - adults taking charge while the council is put on the naughty step - this is a fiction. It is an inherently political decision, even though it is framed in administrative language. Their appointment would represent a decisive shift of power away from local democracy to central control. Commissioners are a ministerial choice and given that the current government is a Labour government, that would mean for Wirral a political shift from No Overall Control to Labour Control - from shared local decision making to effective Labour rule. Commissions can override elected councillors, control budgets, assets, and governance, yet they are unelected and unaccountable locally. That can never be politically neutral. So, if Commissioners are appointed, Wirral Liberal Democrats must treat them exactly as they would a Labour majority administration, with robust, constructive opposition. 

30 years of Labour

Labour have led Wirral Council for all but one year since 1995. So, think a little on what it would mean for local Labour Councillors. Not only would their own government be saying it had no confidence in them, it would be shifting the shared blame for the current financial position onto their shoulders. 

Councillors may need to face the sad reality that they have the choice to either make even deeper cuts in local services to balance the budget or accept Labour appointed commissioners taking over. Wirral does not have enough money to provide the services that residents rightly expect. That said, we cannot blame everything on Westminster. Residents can see long-running regeneration failure in Birkenhead town centre, years of drift, and visibly deteriorating council assets. Accountability must be shared honestly.  That shared accountability does not mean obscuring where power and responsibility would then lie.

Simon Holbrook was a Liberal Democrat Councillor for Prenton from 1999 to 2011 and Deputy Leader of the Council from 2008 to 2011.