Bedford Borough Council has been warned it is already in “Section 114 territory”, the point at which a council effectively declares itself unable to set a balanced budget, unless urgent action is taken to halt overspending and rebuild reserves.
In a draft report seen by the Bedford Independent, the Chartered Institute of Public Finance and Accountancy (CIPFA) has painted a stark picture of the Borough’s finances, highlighting a projected £7m overspend this year, which could wipe out its general fund entirely.
Reserves have already fallen to just £11m, below the minimum risk level, with CIPFA’s review warning of a £33 cumulative funding gap by 2029/30 if nothing changes.
The council has been told it must impose tighter spending controls, improve financial accountability, recover unpaid debts, review capital commitments, and make better use of fees and charges.
CEO at the council, Laura Church, briefed staff just moments ago (10am, 15 July). A council spokesperson confirmed to the Bedford Independent that the review was “a proactive step” to sense-check its approach and identify risks early.
“While the findings remain in draft, the emerging messages are clear and already informing the actions the council is taking,” they said.
Staff have been told the council’s response will focus on an Improvement Plan, already being developed, alongside the Stability Plan and revised Medium Term Financial Strategy to 2030.
The spokesperson added, “The challenge is significant, but this early intervention, combined with honest assessment and firm action, gives us a real opportunity to return the council to a sustainable position.”
“A building already on fire”
The release of the CIPFA report, commissioned by the council, had been discussed at a recent scrutiny meeting with calls for it to be made available to all councillors and the public.
Read: Transparency at Borough Hall called into question again as finance report still not shared
Now the report has been released, councillors from all parties have sought to reassure Bedfordians, while also looking to lay blame.
Portfolio holder for finance, Cllr Marc Frost (Conservative, Wixams), told the Bedford Independent the report confirmed the seriousness of the financial position.
“We inherited a building that was already on fire and the extinguishers were empty,” he said, blaming 14 years of what he called “irresponsible financial management” under the previous Liberal Democrat administration.
He welcomed CIPFA’s endorsement of the council’s Stability Plan, senior leadership restructure, and revised financial strategy, but admitted “difficult decisions are coming.”
However, he moved to reassure residents that the focus would be on sustainability rather than cutting frontline services or jobs. “We are not looking to cut staff, and we are not looking to charge residents for services they currently receive for free,” he said.
“Our focus is on reviewing discretionary policies, like the overly generous council tax reduction scheme, and making sure any charges are fair and sustainable.”
On the risk of a Section 114 notice, Cllr Frost said: “CIPFA has not said a Section 114 notice is required today. What it has said is that there’s a risk and immediate action is needed to avoid it. We take that warning seriously.
“The real issue is the structural mismanagement that created this crisis. Recovery will not be easy, but it is achievable if all parts of the council – including the opposition parties – pull together and face the reality of the challenge.”
Opposition warns of impact on residents
Opposition parties were quick to respond. Liberal Democrat leader Cllr Henry Vann (De Parys) said he’d been told last week the council was “in effect bankrupt” and accused the Conservatives of “reckless and wasteful” decisions since taking office.
“Residents must come first,” he said. “We urgently call on the mayor to produce a recovery plan, cancel wasteful spending, and put the plan to all councillors so we can work together in the interests of residents.”
Cllr Michael Headley (Putnoe), former portfolio holder for finance during the Liberal Democrat administration, added, “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.
“All that has been thrown away in just two years by the reckless and wasteful approach adopted by the Conservatives.”
A spokesperson for Bedford Borough’s Labour group said they would be calling for an independent Improvement Panel and an all-member meeting with CIPFA.
“We appreciate external pressures have exacerbated the problem and stand ready to work together to ensure the best possible outcomes for residents,” they added.
Meanwhile, Green councillor Paul Edmonds (Castle & Newnham) called the report “deeply concerning but not surprising” and warned, “The burden of this crisis must not fall on the poorest in our community.
“Council tax support, vital care, and basic services need to be protected wherever possible. The path to stability must be shared fairly across income groups.”
Where the money goes
CIPFA’s review highlights that spending on temporary accommodation, adult social care, and children’s services is driving the overspend.
It also found the council has struggled to collect debts and relied too heavily on reserves rather than building sustainable income, as well as overspending in planning and building control, highways and traffic operations.
The report calls for improved financial oversight, more realistic savings plans, and stronger financial literacy among managers and councillors alike.
The council has also been told to review its capital programme, review contracts and procurement, and benchmark its council tax support scheme against other authorities.
In the meantime, staff have been told this morning that everyone has a part to play in strengthening financial discipline and accountability. The council is expected to publish its Improvement Plan in the coming weeks.
Cllr Frost said the administration was committed to turning the situation around: “We are confident because we are doing the hard work now that should have been done many years ago.
“We are not repeating the mistakes of the past. We are making the decisions our predecessors avoided, and we are rebuilding a council that serves its residents properly.”
The Bedford Borough Council spokesperson says that “Work is already underway to respond to these findings”, with an improvement plan being prepared, supported by external expertise.
They added, “The Council will keep staff, elected members, and residents informed as we move forward.
“While the challenge is significant, this early intervention, combined with honest assessment and firm action, gives us a real opportunity to return the Council to a sustainable position.”
