{
 "meta": {
  "title": "Council finances in England",
  "standfirst": "How English local authorities are faring financially, from government bailout data, formal notices of inability to balance the books, and the national revenue outturn. The number of councils receiving emergency government support rose from 19 in 2024 to 25 to 30 in 2025 to 26, with about 1.32 billion pounds committed for the latest year. This page covers England only. The data are English local authority returns; comparable figures for Scotland, Wales and Northern Ireland are not included here.",
  "basis": "Exceptional Financial Support (EFS) is a loan facility that the government grants to councils facing an otherwise unmanageable budget gap. Receiving EFS does not mean a council is insolvent but it does signal that normal reserves and council tax income have proved insufficient. A Section 114 notice is a formal statement from a council's chief financial officer that current or future expenditure will exceed available resources. It freezes most new spending and is the nearest thing in local government to a declaration of insolvency. Reserves data are from the MHCLG Revenue Outturn return (RS) 2024 to 25. The proxy used here is unallocated financial reserves plus other earmarked financial reserves at 31 March 2025, divided by net current expenditure. This is a proxy, not an official distress measure.",
  "sourceNote": "EFS: gov.uk EFS guidance 2025 to 26, published 20 February 2025. Section 114 notices: Institute for Government tracker and published council reports. Reserves: MHCLG Revenue Outturn RS data by local authority 2024 to 25.",
  "keyFigures": {
   "efsCouncils2526": 30,
   "efsTotalM": 1320.6,
   "efsCouncils2425": 19,
   "efsLAsSince2020": 42,
   "s114Councils": 14
  }
 },
 "headline": {
  "eyebrow": "The surge in emergency support",
  "heading": "From 19 councils to 30 in a single year",
  "intro": "In 2024 to 25, 19 English local authorities were receiving Exceptional Financial Support from central government. For 2025 to 26 that number rose to 30, with total support commitments of about 1320.6 million pounds for the year. Since the EFS framework began in 2020 to 21, 42 local authorities have received over 5 billion pounds of support in total. The growth in the number of councils needing this support, and the scale of the sums involved, points to a structural gap between what English councils are expected to spend and what their income allows.",
  "efsCouncils2425": 19,
  "efsCouncils2526": 30,
  "efsTotalM": 1320.6,
  "efsLAsSince2020": 42
 },
 "efs": {
  "eyebrow": "Exceptional Financial Support 2025 to 26",
  "heading": "The biggest bailouts",
  "intro": "Thirty local authorities in England are receiving Exceptional Financial Support for 2025 to 26, totalling about 1320.6 million pounds. Birmingham heads the list at 180 million pounds, followed by Bradford at 127 million, Croydon at 110 million and Southampton at 89.9 million. Several councils appear on the EFS list and have also issued Section 114 notices, including Croydon, Nottingham and Woking, reflecting the depth of their financial difficulty.",
  "top10": [
   {
    "name": "Birmingham",
    "amount": 180.0,
    "notes": null
   },
   {
    "name": "Bradford",
    "amount": 127.1,
    "notes": null
   },
   {
    "name": "Croydon",
    "amount": 110.3,
    "notes": null
   },
   {
    "name": "Southampton",
    "amount": 89.9,
    "notes": null
   },
   {
    "name": "Havering",
    "amount": 88.0,
    "notes": null
   },
   {
    "name": "Woking",
    "amount": 74.6,
    "notes": null
   },
   {
    "name": "Thurrock",
    "amount": 62.11,
    "notes": null
   },
   {
    "name": "Barnet",
    "amount": 55.7,
    "notes": null
   },
   {
    "name": "Newham",
    "amount": 51.2,
    "notes": null
   },
   {
    "name": "Somerset",
    "amount": 45.118,
    "notes": null
   }
  ],
  "totalM": 1320.6,
  "count2526": 30,
  "count2425": 19
 },
 "s114": {
  "eyebrow": "Section 114 notices since 1988",
  "heading": "14 councils, some more than once",
  "intro": "The Institute for Government records 14 councils that have issued a Section 114 notice since 1988. The mechanism is rarely used; for most of those years there were none. The pace has quickened sharply in recent years: Thurrock issued one in December 2022 after failed investments; Woking in June 2023 after accumulating a 1.2 billion pound deficit from risky commercial borrowing; Birmingham in September 2023 amid a combination of an Oracle IT failure and equal pay liabilities estimated at up to 760 million pounds; and Nottingham issued its second notice in November 2023. Three councils have issued more than one notice: Croydon three times (2020 and 2022), Northamptonshire twice (2018) and Nottingham twice (2021 and 2023).",
  "totalCount": 14,
  "repeatIssuers": [
   {
    "council": "Croydon",
    "count": 3
   },
   {
    "council": "Northamptonshire",
    "count": 2
   },
   {
    "council": "Nottingham",
    "count": 2
   }
  ],
  "timeline": [
   {
    "council": "Brent",
    "date": "1988-12-06",
    "year": 1988,
    "reason": "Predicted budget deficit"
   },
   {
    "council": "Lambeth",
    "date": "1989-07-03",
    "year": 1989,
    "reason": "Poll tax dispute - force councillors to authorise finances"
   },
   {
    "council": "Camden",
    "date": "1992-11-11",
    "year": 1992,
    "reason": "Budget deficit"
   },
   {
    "council": "Hillingdon",
    "date": "2000-07-05",
    "year": 2000,
    "reason": "Budget shortfall"
   },
   {
    "council": "Hackney",
    "date": "2000-10-17",
    "year": 2000,
    "reason": "GBP 15.5m hole in finances"
   },
   {
    "council": "Milton Keynes",
    "date": "2002-11",
    "year": 2002,
    "reason": "Prevent unlawful spending"
   },
   {
    "council": "Northamptonshire",
    "date": "2018-02-02",
    "year": 2018,
    "reason": "Risk of GBP 10m deficit (first of two)"
   },
   {
    "council": "Northamptonshire",
    "date": "2018-07-24",
    "year": 2018,
    "reason": "GBP 60-70m deficit projected (second of two)"
   },
   {
    "council": "Croydon",
    "date": "2020-11-11",
    "year": 2020,
    "reason": "GBP 60m overspend; ~GBP 1.5bn debts (first of three)"
   },
   {
    "council": "Croydon",
    "date": "2020-12-02",
    "year": 2020,
    "reason": "GBP 66m predicted overspend (second of three)"
   },
   {
    "council": "Slough",
    "date": "2021-07-02",
    "year": 2021,
    "reason": "Budget deficit"
   },
   {
    "council": "Nottingham",
    "date": "2021-12-15",
    "year": 2021,
    "reason": "Prevent unlawful spending (ringfenced HRA funds misused)"
   },
   {
    "council": "Croydon",
    "date": "2022-11-22",
    "year": 2022,
    "reason": "GBP 130m budget deficit (third of three)"
   },
   {
    "council": "Thurrock",
    "date": "2022-12-19",
    "year": 2022,
    "reason": "Budget deficit after failed investments"
   },
   {
    "council": "Woking",
    "date": "2023-06-07",
    "year": 2023,
    "reason": "GBP 1.2bn deficit from risky investments"
   },
   {
    "council": "Birmingham",
    "date": "2023-09-05",
    "year": 2023,
    "reason": "GBP 87m deficit; equal pay liabilities"
   },
   {
    "council": "Nottingham",
    "date": "2023-11-29",
    "year": 2023,
    "reason": "GBP 23m overspend projected"
   }
  ]
 },
 "reserves": {
  "eyebrow": "Reserves as a share of spending, 2024 to 25",
  "heading": "A proxy, not a verdict",
  "intro": "The Revenue Outturn data allow a rough proxy for financial cushion: unallocated financial reserves plus other earmarked reserves as a share of net current expenditure at 31 March 2025. Across all 407 English local authorities with positive net current expenditure, the median is about 28.5 per cent. The most stretched authorities include Plymouth, where the combined figure is about negative 0.5 per cent (unallocated reserves are negative), and Hillingdon at about 0.7 per cent. Shropshire, West Berkshire and Cheshire East are each around 3.5 to 3.8 per cent. A low ratio means little buffer against an unexpected cost pressure. This is a proxy measure only: it does not capture contingent liabilities, borrowing, or ring fenced reserves that may be available in a crisis.",
  "medianPct": 28.5,
  "laCount": 407,
  "mostStretched": [
   {
    "name": "Plymouth UA",
    "ratio": -0.5
   },
   {
    "name": "Oxford",
    "ratio": 0.0
   },
   {
    "name": "Hillingdon",
    "ratio": 0.7
   },
   {
    "name": "Shropshire UA",
    "ratio": 3.5
   },
   {
    "name": "West Berkshire UA",
    "ratio": 3.5
   },
   {
    "name": "Cheshire East UA",
    "ratio": 3.8
   },
   {
    "name": "Gloucester",
    "ratio": 4.1
   },
   {
    "name": "Sefton",
    "ratio": 4.4
   }
  ],
  "caveat": "Reserves to spend is a proxy, not an official financial health metric. Councils with negative unallocated reserves may have earmarked funds available; those with high ratios may still carry large off balance sheet liabilities. Oxford City, at approximately 0 per cent, is a district council and not directly comparable to unitary or county authorities on this measure."
 },
 "questions": {
  "eyebrow": "Questions this raises",
  "heading": "For local government finance policy",
  "items": [
   "The number of councils needing emergency government support rose from 19 to 30 in a single year. Is this a temporary cash flow problem or evidence of a permanent structural gap between council income and their legal duties?",
   "Section 114 notices have historically been extremely rare. Four were issued in 2022 and 2023 alone. What has changed in the funding settlement or cost environment to make this once in a generation event so frequent?",
   "Birmingham accumulated liabilities of several hundred million pounds from an Oracle IT project and equal pay claims before issuing a Section 114. How well does the current audit and oversight regime detect councils in trouble before they reach that point?",
   "Several councils appear on both the EFS list and the Section 114 list. Does receiving EFS reduce the pressure to cut services to the point where it delays necessary restructuring?"
  ]
 },
 "sources": [
  {
   "name": "Exceptional Financial Support guidance 2025 to 26 (MHCLG, published 20 February 2025)",
   "url": "https://www.gov.uk/guidance/exceptional-financial-support-for-local-authorities-for-2025-26"
  },
  {
   "name": "Section 114 notice tracker (Institute for Government)",
   "url": "https://www.instituteforgovernment.org.uk/explainer/local-government-funding-england"
  },
  {
   "name": "Revenue Outturn RS data by local authority 2024 to 25 (MHCLG)",
   "url": "https://www.gov.uk/government/statistics/local-authority-revenue-expenditure-and-financing-england-2024-to-2025-individual-local-authority-data-outturn"
  }
 ],
 "caveats": [
  "This page covers England only. The EFS framework and Section 114 mechanism are English; devolved nations have different oversight arrangements and the data are not comparable.",
  "Section 114 notice counts are compiled from the Institute for Government tracker and published council documents. The Institute for Government records 14 councils since 1988; this page reproduces that figure.",
  "The reserves to spend proxy (unallocated plus other earmarked reserves divided by net current expenditure) is not an official distress measure. It excludes ring fenced reserves, HRA reserves, schools reserves and contingent liabilities. Use it as a rough indicator only.",
  "EFS amounts are loans, not grants, and do not necessarily reflect the full scale of a council's financial problem. Some EFS is Housing Revenue Account support (noted in the data).",
  "The combined authority entry (South Yorkshire Mayoral Combined Authority) is included in the EFS list as published but is a different type of body from a local authority."
 ]
}