What happens next if Bristol councillors fail to pass city budget after second attempt

Each year Bristol councillors have to agree how much money should be spent on vital public services, but this week those talks ended in stalemate.

Next week they will come back to City Hall for a second attempt, but if this fails too then government ministers could intervene.

Bristol City Council spends over half a billion pounds a year on day-to-day spending, not including capital projects like building new council housing, or even running schools. But the costs of running services are rising faster than the income the council receives to pay for them.

By law, local authorities have to set a balanced budget for each financial year, running from April to March. This must happen before March 11, otherwise they face serious consequences and could quickly lose a lot of money.

Councillors did not vote to approve the proposed budget, put forward by outgoing Labour mayor Marvin Rees, during a three-hour long meeting in City Hall on Tuesday, February 20. They are due to come back on Wednesday, February 29, when they will again vote on the financial plans.

If councillors fail to pass a balanced budget, then the government would likely intervene. Tim O’Gara, the council’s monitoring officer and top lawyer, would refer the stalemate to the secretary of state, who would most likely force through the mayor’s original proposed budget.

Setting the budget includes estimating how much money the council will spend on providing services, and how much income it will receive through fees, council tax, grants and other sources. As the limited source of funding never matches the aspirations of what local politicians want to change about the city, agreeing on what takes priority is often hard and controversial.

Elsewhere in the country, some councils haven’t managed to balance their books. Three small numbers spark dread among local politicians: a Section 114 notice is issued by the council’s chief finance officer if the numbers don’t add up, and effectively the city goes bankrupt. Government commissioners then take control, and drastically cut spending while hiking taxes.

In Birmingham, council tax is rising by a whopping 21 per cent over the next two years, while at the same time many public services will be cut to the bone. Hundreds of jobs are at risk, after the city council there issued a Section 114 notice last year. But in Bristol, the mayor’s proposed budget did manage to balance the books - however opposition councillors vetoed his plans.

Three things could happen next. Either Mr Rees will bring his budget back to City Hall and ask councillors to vote on it again on Wednesday, February 29, or he could make minor changes to win the temporary support of opposition parties. A third but unlikely option is councillors coming back next Wednesday with an alternative budget, needing a two-thirds majority vote to pass.

Two years ago when another stalemate happened, Mr O’Gara and Denise Murray, director of finance, warned councillors in a stern letter that the council would face dire consequences if they failed to vote through the budget in a second full council meeting. They added the council would incur “serious financial losses very soon from a late setting of the budget”.