Bedford Borough Council is likely to apply for government financial support later this financial year, and a senior council officer said there is an even greater likelihood that further support will be needed in 2026/27.
The position was set out at the Budget & Corporate Services Overview and Scrutiny Committee on 16 October, where councillors examined reports on the council’s in-year financial position and medium-term outlook.
A Revenue and Capital Budget Trends report warned that if the council cannot balance its budget in 2025/26, it will need to consider applying for Exceptional Financial Support (EFS) from the Government.
The same report shows a forecast overspend of £13.569 million as of 30 June 2025 and confirmed that discussions with government officials are already underway, but no application has yet been made.
Read: Report says Bedford Borough Council must take urgent action to avoid bankruptcy
Read: Bedford Borough “no exception” as new report finds councils across England “on their knees”
During the meeting, a senior officer went further, telling councillors that it is likely the council will apply for EFS later this financial year, and that there is an even greater likelihood of needing to apply in 2026/27, when the council faces a projected £30 million budget gap.
No formal decision yet
Julie McCabe, the council’s executive director of resources, told the committee that while the authority is working to balance the budget, “the likelihood as we move further into the year is that the council is likely to need to apply for EFS.” However, she stressed that no formal decision has yet been taken.
She explained that the council’s Medium-Term Financial Strategy (MTFS) refresh shows a £30 million budget gap in 2026/27 – adding that the MTFS was written on the basis that there is an “even greater likelihood” the council will need to apply for government support that year.
The council’s financial resilience has weakened following a £1.567 million overspend last year, which reduced the general fund balance to £9.617 million, below the risk-assessed range.
Service pressures are being driven by rising costs in Adult Social Care, Children’s Services, and Temporary Accommodation, alongside shortfalls in housing benefit subsidy and higher-than-expected pay awards.
Council cuts
To address the position, the council has identified £3.75 million of savings so far, with an additional £1.3–£4 million of potential measures under review. A Spending Management Panel has been set up to review all expenditure over £500 before commitments are made.
Read: £11.5m Bedford Borough Council savings plan includes cuts to staff, voluntary service and libraries
The council has also decided to suspend four-hour free parking at Allhallows and Lurke Street multi-storey car parks and to cease the current year’s Members Ward Fund allocations, with existing commitments honoured.
Read: Council confirms four-hour free parking to pause as Bedford Borough faces financial pressures
EFS is a mechanism that allows councils in severe financial difficulty to access additional help from central government, typically by borrowing or using capital flexibilities to fund day-to-day spending.
Councils, including Thurrock, Slough and Birmingham, have all relied on EFS in recent years following effective bankruptcy notices under Section 114 of the Local Government Finance Act.
Any decision to apply for EFS would need formal approval by the council and the Department for Levelling Up, Housing and Communities (DLUHC), which assesses and decides whether to grant support.
Any support offered is likely to come with conditions and increased government oversight of local finances.
by John Guinn
Local Democracy Reporter
