York council's finance boss has warned of the dangers of an unbalanced budget as she defended sweeping cuts to services.

Cllr Katie Lomas, City of York Council's executive member for finance, said failure to take "tough decisions" now could have resulted in the authority being forced to issue a section 114 notice, effectively declaring itself bankrupt.

But that, she warned, would mean government commissioners would come in and take over the council's purse strings - adding: "The level of cuts would be so severe, that I don't know how the council could ever recover from them."

Last month the Labour-run council voted through a raft of budget measures in a bid to save more than £14 million as it struggles to plug a projected £40 million 'black hole' in council finances over the next four years.

Measures included a hike in council tax, cuts to library funding, a charge for green bin collections and cuts to the adult social care budget.

Cllr Lomas spoke to The Press to explain the stakes behind the cuts - and the stark reality of an unbalanced budget.

She said if a local authority failed to balance its books, it would need to issue a section 114 notice to the Government - a legal measure stating that the council cannot meet its expenditure commitments from its income.

"You’re essentially formally telling the government that you can no longer balance the budget,” Cllr Lomas said.

"I think for everyone in local government at the moment, a section 114 notice is something that has suddenly become much more of a focus than it ever has in the past.

"It's brought it into a stark reality."

Recently, both Birmingham and Nottingham city council's have issued section 114 notices.

Cllr Lomas said a notice leads to a "number of actions" from central Government.

She said: "There may be some short term bailout money, but the main impact is the government sends in commissioners."


The commissioners come in and operate at the council's expense. Once in control, their main aim is to cut expenditure, said Cllr Lomas.

"The way that they achieve that is they strip out any expenditure on anything that isn’t statutory provision at the minimum level," she added.

"That I think leaves a lot of scope.

"What we’ve seen in Birmingham is that they’re cutting all they’re expenditure on culture.

"The level of cuts would be so severe, that I don't know how the council could ever recover from them."

Cllr Lomas also explained that, in Birmingham, proposals are already in place to raise council tax by 20 per cent.

The recent council cuts in York, agreed at a budget council meeting on February 22, included a £600,000 cut over two years to York Explore's budget - the company which operates the city's library service.

Cllr Lomas said: "We've had to make really tough decisions.

"We make those decisions as representatives of the people of York.

"It's not that commissioners don't care about the people of York, it's that it's not as relevant to them as cutting expenditure is."

However, Cllr Lomas said she hoped for some recovery after this year's budget.

The cuts, she said, were part of a medium term financial strategy to balance the books, but she still hoped to "rebuild" the affected services.