Stevenage Borough Council could be at risk of bankruptcy amid coronavirus losses

PUBLISHED: 16:12 18 May 2020 | UPDATED: 08:12 20 May 2020

Council leader Sharon Taylor said a Section 114 notice is

Council leader Sharon Taylor said a Section 114 notice is "under review." Picture: DANNY LOO

©2018 Danny Loo Photography - all rights reserved

Stevenage Borough Council is on the brink of issuing a Section 114 notice – meaning it could be at risk of bankruptcy – if no further government funding is provided, it has emerged.

Stevenage Borough Council leader Sharon Taylor said “the issue of a Section 114 notice is under review,” and warned that if no government funding comes forward, the council is facing a “very difficult situation” which would likely mean job losses and essential service cuts.

A Section 114 notice is an emergency measure issued by councils in grave financial cirumstances, banning all new expenditure – with the exception of safeguarding vulnerable people – and is a public recognition that the council no longer has the resources to meet its expenditure.

As it stands, SBC has suffered £4.5 million in lost income due to the coronavirus pandemic, but this figure could rise to £8 million by the end of the year. To put this into perspective, the council’s annual budget for 2020 is £9 million.

It has also emerged that only £917,000 has been provided by central government.

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At a meeting of the council’s executive last Wednesday, councillors were told there would be an emergency budget, with Cllr Taylor suggesting that job losses may need to be considered.

Cllr Taylor said: “We will have emergency budget meetings in the coming weeks. We are looking at all other options but we’ve already had to take around £10m out of our budget, pre-coronavirus, because of government grant cuts and increased costs.

MORE: What has Stevenage MP Stephen McPartland been up to during this crisis?

“While job losses and cuts to essential services will be a last resort, it is difficult to see how we avoid such tough choices if there is no funding forthcoming from government.

“I can’t overestimate the difficulty these new financial pressures will cause us, on top of what was already a challenging situation. Councils cannot run deficit budgets. We have to make the books balance each year. Our reserves are close to minimum levels and fees and charges income are drastically down – some as much as 93 per cent this time last year.”

Cllr Taylor said that putting up council tax “is not an option,” as residents are also “having a difficult time financially”.

It was revealed last week that almost one in five council tax payers in Stevenage failed to make a payment last month.


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