West Berkshire Council cash crisis: ‘Don’t panic’

The Government may have to give West Berkshire Council more cash to stop it going bankrupt.

Latest figures show the council is another £6.8m down – meaning it doesn’t quite have enough in the bank to keep going.

Council finances are described as ‘weakening quarter by quarter’.

Drastic measures are now planned, with the bankruptcy officer (under “Section 151”) now taking over spending authority via a spending review board, and putting a hard stop on all so called ‘discretionary spending’.

A spending review panel is now proposed, alongside the relaunch of the Financial Review Panel.

The council is now in a financial position where expenditure that does not fall into the category of essential must cease.

The low-hanging fruit here will be things like training courses, travel, off site meetings and the like.

At this stage, there is no move to cut any services – but any move to go cap in hand for a second time this year for emergency funding from the Government could come with a demand on staffing restructures.

West Berkshire Council, like many local authorities, has a multiple tier management structure which would be a target for the ‘right people, right numbers in right places’ approach.

Council leader Jeff Brooks (Lib Dem, Thatcham West – photographed above) won’t be drawn on the level of concern, and stresses there is ‘no reason for panic’, but will no doubt be steeling himself for a political battering from the opposition when the council executive meets next week (Thursday) to discuss the situation.

The council currently has a General Fund Reserve of just over £10m, which has been built utilising previously requested Exceptional Financial Support from central government.

The Q2 2025/26 forecast will effectively reduce the General Fund Reserve by £6.8m, taking the fund under the level recommended by the Section 151 as being financially sustainable.

Council officers leading adult social care and children’s services are to face a grilling from the Liberal Democrat cabinet after what can best be described as a financial googly being thrown at it from the previous financial quarter’s figures – which leapt from around £800,000 to a £6.8m debt in the space of three months.

That meeting is scheduled in the coming week (Monday), where they will need to explain why costs have spiralled by 40 per cent in three years in children’s services and 20 per cent in adult social care.

Lib Dem politicians will want to know what costs have increased and why.

UK inflation can’t be blamed, as it has decreased significantly over the past three years, from a peak of 11.1 per cent in October 2022 to a more recent rate of 3.8 per cent in September 2025.

The increases are described as ‘relating predominantly to increasing commissioning costs’, those being the national living wage, National Insurance contributions and wider inflation.

In 2022/23 the external spend to put children into care homes was £11.4m. Three years later that cost sits at £21.4m.

Paul Coe leads the adult social care team, which partly blames increased cost of new packages, rather than the number of people in receipt of long-term care.

Also, the move to shift the council’s care homes to external providers hasn’t yet happened, which adds another £2m to the bill.

The council says it now has two children in its care, costing around £1m a year each.

The children’s services team, headed by Anne Marie Dodds, who was appointed two years ago from Northampton Council, was just this week celebrating a ‘Good’ Ofsted rating. But at what cost?

Ms Dodd’s team says placements costs have been driven by the volume of children in care and the complexity of the care required.  Lawyers’ costs have been driven by the increase in children entering care, and therefore the volume and complexity court hearings.

A report to the council executive says: “To further illustrate the pressure faced by WBC in this area, the top 25 most expensive placements in the current financial year cost over £13m per year, or seven per cent of the entire council budget.

“This figure was £5m in 2019-20, and the figure has increased by 165 per cent in just over five years.”

Furthermore, the recently enthroned CEO of the council, former finance lead Joseph Holmes, is facing the challenge of moving from being a colleague to the boss of the overspending teams.

He previously held the executive director role, which has included overseeing the council’s financial performance.

He will no doubt be asked to explain the financial reporting surprise in the latest papers to council with some pointed questions behind closed doors from the Lib Dem finance portfolio holder Iain Cottingham, who was, until recently, head of corporate finance risk for a major, multi-billion pound turnover telecom company.