£53.6m savings put Dudley Council's finances back in the black

A Black Country council which had been effectively on the brink of bankruptcy has stabilised its financial position after cutting £53.6 million from its budgets.

A report to Dudley Council’s cabinet said the authority had made a £14 million surplus last year, which it hailed as its ‘strongest financial performance in recent years’.

The savings allowed the authority to rebuild its reserves, which in 2024 fell to just eight per cent of total expenditure - and was on a trajectory to fall to just four per cent, putting the council at risk of effective bankruptcy.

Councillor Steve Clark, cabinet member for resources, said the improved financial position had allowed the council to invest in vital services while strengthening its long-term financial resilience.

He said the 2025/26 budget report shows the council ended the financial year in a stronger position than forecast in December, reflecting improved financial management, rigorous budget controls, increased organisational discipline and the commitment and hard work of staff.

Thursday’s meeting of the cabinet will be told that the council managed to find £53.6 million in savings last year, representing 88 per cent of its savings programme.

But the remaining savings, which could not be met due to pressures on services and the need to protect the most vulnerable residents, are expected to be identified during the coming financial year.

Councillor Clark said the report was a significant milestone and demonstrated real progress in restoring financial stability and resilience.

"This result has not happened by accident,” he said.

“It reflects the dedication of our staff, the determination of our senior leadership team and the willingness of elected members to make difficult but necessary decisions to put the council on a more sustainable footing.

"Over the last two years we have taken action to improve financial management, challenge spending, deliver major savings programmes and strengthen accountability across the organisation.”

He said the council now held £64.2 million in reserves, meaning that services would be protected from future uncertainty and increasing demand pressures.

“However, the council is not complacent and continues to build those reserves further as they remain low compared to other comparable councils,” he said.

"Importantly, this stronger position gives us greater opportunity to invest in the priorities that matter most to local people, supporting vulnerable residents, improving neighbourhoods, strengthening community services and delivering the regeneration ambitions that will help create jobs and growth across the borough.”

He warned that the council continued to face significant financial challenges, particularly around children’s services.