Leeds Council chief pledges city 'will not be allowed' to go bankrupt like Birmingham amid huge budget pressure

Birmingham, which is the largest local council in the UK, issued a Section 114 notice last week, which means spending on all non-essential services will cease.

Leeds, which is the country’s second-largest local authority, is in dire financial straits and is currently forecasting a £34m overspend on its own annual budget.

But a full council meeting on Wednesday was told Leeds would not go the same way as Birmingham, despite the grim numbers.

But the authority’s deputy leader, Debra Coupar, warned further cutbacks were likely to be made without further financial support for local government.

She said: “Just last week we saw Birmingham become the latest council to issue a Section 114 notice and effectively declare itself bankrupt.

“We cannot and will not allow that to happen here in Leeds. But let’s not be fooled here. It’s not only Labour councils that are facing issuing Section 114 notices.

“We’re doing absolutely everything we can to manage the projected overspend and every single penny will be examined.

“Make no mistake, there will be difficult decisions to be made and we simply can’t continue as we are because the money we need from government to provide services simply isn’t there.”

But opposition councillors had earlier criticised the Labour administration’s handling of council finances.

Councillor Andrew Carter, former leader of the council’s Conservative group said: “The budgetary position appears to be like a runaway train.

“It yet again appears to be a case of bogus budgeting. This council voted for a budget earlier this year and it’s been busted open in month four.

Addressing the chair of the council’s audit committee, which scrutinises the authority’s finances, he added: “I hope your committee will very quickly look at how we have got into this state.”