Council Faces Bankruptcy

The Council is now facing bankruptcy. This follows a report from external financial experts that were brought in. Last week councillors were told that Bedford Borough Council is ‘in effect bankrupt’.

Cllr Henry Vann said, “It is deeply sad that, despite our repeated warnings, we now see the Conservative Mayor’s decisions lead us to this disastrous point – including a budget set this year, against our advice, that simply didn’t stack up.

“As we know from our own personal finances, if you were to go on a reckless spending spree and end up spending all your savings and take on more and more loans you will before long get into real difficulty. That, sadly, is where the council is now.

“Liberal Democrats realise that this is deeply worrying for local residents who must come first and we have called on the Mayor to urgently produce a recovery plan, cancel wasteful spending that does not protect residents, and put the plan to all councillors so that we can work together in the interests of residents."

Councillor Henry Vann, Liberal Democrat leader, has  assured all residents and businesses in the Borough that he and all Liberal Democrat colleagues will work tirelessly, alongside anyone willing to work with them, to clean up the mess that has been created over the last two years.

 How Did The Council Get Here?

The Council finances had been on a steady footing until the Conservatives took over in 2023. Despite the period of austerity, the pandemic and the cost-of-living crisis, the Council was able to protect services and keep costs down. In fact reserves increased and council debt was brought down. 

Every budget set and managed to its outturn by the previous Liberal Democrat led administration was underspent (meaning your money was looked after carefully). A total of £21.5m was underspent – this was reinvested in facilities and services for residents.

All that has been thrown away in just two years by the reckless and wasteful approach adopted by the Conservatives. There was a complete change in approach to managing the council finances.

Bedford Borough Council Tax  is close to the average for unitary councils.  If the current administration can’t manage with an average council tax level, then that says more about them than it does the level of council tax.  

The recent report was commissioned from CIPFA (Chartered Institute of Public Finance and Accountancy). This follows the Mayor calling in a Financial Crisis Expert earlier in the year.

Liberal Democrats have been highlighting the failings of the current administration for many months, including wasteful spending and cancelling vital meetings, with the biggest failing coming with the Council setting a budget with a £10m hole in it.

In the last two years (from March 2023 to March 2025) reserves have been reduced from £57m to £28m and council external borrowing has gone up from £60m to £129m.  This has meant that the annual costs of paying for the borrowing has gone up by £4m between 2022/23 and the current year – money that then has to be cut from elsewhere.

The report underlines the many failings that Liberal Democrats have been highlighting for a long time. In particular it mentions:

* They need to be better at budget setting, to avoid the in-year overspends we are seeing this year,

* The “rainy day” General Fund balance will be totally depleted at this rate,

* Budget monitoring needs improving throughout the year,

* There is too much short-term borrowing,

* The changes they made to paying back borrowing will mean that costs will increase in future years, and

* Existing business cases (and spending commitments) need reviewing. 

What Happens Next? 

Liberal Democrats are calling for the Mayor to produce a recovery plan, cancel wasteful spending that does not protect residents, and put the plan to all councillors so that we can work together in the interests of residents. We currently are waiting to see the formal council response.

Turning around the waste of the last two years is going to be very challenging and will potentially impact many services to local residents. However, we want to assure all residents and businesses in the Borough that Liberal Democrat councillors will work tirelessly, alongside anyone willing to join with us, to clean up this mess that has been created over the last two years.