Dudley Council finances rated as 'extreme' - with £13.5 million shortfall forecast

A statement from the report, published by the council at the end of September, says: “Cabinet should note that it is still early in the financial year and that the forecast is uncertain, but this is a significant adverse variance with potentially severe implications for the ongoing Medium Term Financial Strategy.

“The Corporate Risk Register recognises the risk that the council may be unable to set and/or manage its budget so as to meet its statutory obligations within the resources available. In view of the worsening outlook, this risk has been elevated to the maximum rating of 25 (Extreme).”

The news comes following the Grant Thornton report that one in six councils are now in danger of running out of money in the UK next year. It is believed international events such as the war in Ukraine as well as a lack of funds from the central government have increased the strain on councils' finances.

When asked if the “bleak and worrying picture” presented by the report of the council’s finances, means the council is at risk of running out of money, Councillor Steve Clark, cabinet member for finance and legal services said: “We have got challenges ahead but at this point, we have not run out of money.”

This is combined with the news that council's corporate electricity prices have increased by 80 per cent from October 1, gas prices will increase by 80 per cent from April 1 and diesel will increase by more than 30 per cent. The combined impact of these is expected to be around £2.7m.

In a separate statement, Councillor Clark has now said the council will “assess its financial position” and bring a new budget plan in December.

He said: “The council is currently assessing the financial position and will bring draft budget plans in a report to cabinet in December. That report will set out any proposed changes to services, which in themselves will be subject to consultation before any final decisions are made.”