Southampton City Council could go bankrupt this year
John Harrison, the chief finance officer, made the statement in a budget report on depleting reserves
Mr Harrison said: “This would mean no cover from reserves for large and uncertain financial risks, a critical financial position to reach.
“To avoid that and a risk of government intervention being necessary, additional savings will be necessary.”
Even if the council manages to achieve its £22m plus in savings, according to the figures, it could still be left with not enough reserves to pay for services.
Councillor John Hannides spoke about the major problem in Wednesday’s budget meeting.
He said: “I take no pleasure in drawing attention to what is nothing other than an abject failure by the Labour group collectively.
“Our chief finance officer has been compelled to make extensive observations in this budget report because of the considerable financial risks this council now faces, described later in his report as the finances being on a ‘cliff edge’ – a situation never before seen in this city.
“Today is truly a historic day. It’s the first time we have a lord mayor presiding over a budget meeting.
“But sadly today will be remembered for the wrong reasons.
“The day in which Labour presented the most disturbing budget proposal on record – in which the worst is yet to come.
“The full extent of just how bad things have become under the watch of the Labour group is highlighted extensively in the budget report.”
Attention was brought to the report that ‘the council is spending unsustainably’ and there is an ‘unprecedented and very real prospect’ that the medium term financial risk reserve could run out ‘within a matter of months’.
Cllr Hannides said ‘very drastic action’ must be taken.
Labour insists that it has produced a ‘balanced budget’.