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Newcastle finance chief warns of 'constant battle' as other councils go bust; Birmingham City Council became the latest to effectively declare bankruptcy in September and there are fears that more across the country are also on the brink.

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Byline: By, Daniel Holland

Civic centre bosses in Newcastle have warned they face a "constant battle" to stave off the kind of financial ruin hitting other authorities.

Birmingham City Council became the latest to effectively declare bankruptcy in September and there are fears that, after more than a decade of huge spending cuts and major pressure being caused by inflation, more across the country are also on the brink of collapse. Council chiefs in Durham have warned they must find more than £67m worth of savings in the next four years amid the "immense" challenges, while Middlesbrough Council has a predicted £11.5m hole in its budget that could force it to stop all but essential expenditure if "robust and timely" action is not taken.

In Newcastle, finance officials announced last month that they currently expect to break this year's budget by just over £5m. Chief finance officer Mark Nicholson told councillors last week that the budget is "under control at the moment but it is a constant battle to keep it in that healthy state".

He added: "Yes, a £5.1m projected overspend is not great. But we are confident that it will reduce in the course of the year."

Labour councillor Paul Frew, the council's cabinet member for finance, said that bad decisions and "risky" tactics had been responsible for some authorities going bust but that the trend presented concern for the entire country. He added: "I would not say Newcastle is in that position.

"We have been very prudent with our finances over the years. But an organisation as large as a council will always have some level of decisions that are risky or not quite right... we aren't going to get every decision right, there has to be some room for manoeuvre and to see councils failing because of bad decisions is a concern for everyone."

In Newcastle, the council has had to make £369m worth of cuts since 2010 and Coun Frew urged the Government to take action -- with leaders having long pleaded for a...

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