Express & Star

A quarter of councils are on the brink of financial collapse, warns leader

One in four councils are likely to declare themselves effectively bankrupt in the next 12 months, a senior council leader has warned,

Councillor Shaun Davies is welcomed to a business lunch at the Richardson group by Carl Richardson

And Councillor Shaun Davies, who is chairman of the Local Government Association, said virtually none of the remaining councils could see a way out of the financial crisis within the next three years.

In September last year Birmingham City Council filed a notice under Section 114 of the Local Government Act, effectively declaring itself insolvent, and restricting expenditure to just essential service.

But Councillor Davies, who is leader of Telford & Wrekin Council, and Labour's prospective candidate for Telford at the next General Election, said almost every council in the country was fearful for the future.

He said 80 per cent of council revenues were now being spent on social care.

"That means there is just 20p in the pound left for everything else," he told a business leaders at a lunch hosted by the Black Country-based Richardson group at its headquarters in Oldbury.