Struggling councils swamped by an economic crisis this winter could go bankrupt, a North East Labour chief fears.
Gateshead Council leader Martin Gannon has warned that local authorities are facing an “impossible” situation, with inflation creating major budget deficits totalling tens of millions of pounds. He told a North East Combined Authority meeting that officials in Gateshead were now predicting that the council will have a shortfall of between £55m and £60m in 2023/24 due to escalating costs, rising sharply from an estimated £45m just six weeks ago.
Councils across the region have issued stark warnings in recent weeks about the impact of rising energy bills and inflated contract prices, pleading with the government to offer emergency financial support to avert deep cuts to local services. Coun Gannon said: “We find ourselves in the middle of an incredibly difficult financial situation as local authorities and the plight that is facing our residents and our ability to be able to respond to that.
