Bailed-out Gloucester City Council reports new overspend
Just months after being rescued with a £15.5m emergency Government loan another overspend has been revealed at Gloucester City Council.
There are concerns over another overspend which has come to light at a Gloucestershire council that was granted a multi-million bail out by the Government earlier this year.
Ministers agreed to help Gloucester City Council by offering them an emergency loan of up to £15.5m in February this year.
The Liberal Democrat-led council found itself facing the prospect of becoming effectively bankrupt after audited accounts showed a multi-million pound overspend in recent years.
The Government agreed to provide them with £9.05m and for £3.89m to cover 2024/25 and £2.56m for 2025/26.
But now the latest financial outturn report at the authority shows there was an overspend of more than £1.12m for the third quarter of the last financial year, October, November, December 2025.
These overspends are across several areas. These include a £559,000-overspend in the commercial property budget, some £387,000 in parking, markets and street trading £177,000 and cemeteries and crematorium are £114,000 in the red.
Labour group leader Terry Pullen (Moreland) said he was shocked to discover there was another overspend.
“I was assured that new financial processes had been introduced to closely monitor budgets and ensure that finances were under control,” he said.
“Clearly this is not the case and frankly there are no excuses left,” he said.
“The blame clearly rests with the leader of the council and the cabinet member for finance.
“Only a few months ago the Government bailed the council out with £15.5 million on the assurance that financial controls and good governance were in place.
“Clearly the council are unable to honour those assurances.
“What will the council say to the Government when they ask what has gone wrong?
“It appears that yet again the council have not listened and have not learned and continue to make the same mistakes with council tax payers money.”
Conservative group leader Stephanie Chambers (Quedgeley Fieldcourt) said she called for independent forensic accountants to be brought in to establish the authority’s true position when the financial crisis came to light.
However, the Lib Dems said there was no need and assurances were given that the administration had an accurate assessment of the finances, she said.
“We now know that was not true,” she said.
“Residents are paying the price through higher council tax, increased charges and reduced services, while confidence in the council has been badly damaged.
“People are fed up with excuses. They want answers, they want accountability, and they want to know who is taking responsibility for this mess.”
And Community Independent group leader Alastair Chambers (Matson, Robinswood and White City) said people in the city have had enough of being let down.
“Residents were repeatedly assured that everything was under control,” he said. “It clearly wasn’t.”
He believes heads should roll at the council and that “those responsible cannot simply shrug their shoulders, carry on as normal, and expect the public to forget”.
But Deputy leader Declan Wilson (LD, Hucclecote), who is responsible for finances at the council, said it was disappointing the context of the ovespend and the significant progress that has been made over the last nine months appeared to have been ignored.
He said they have never claimed the council’s financial recovery journey is complete and “have been consistently clear that there is still more work to do”.
The council is now in a far better position than it was when the issues first came to light last September, he added.
“The scale and depth of the council’s financial issues only became fully apparent in September 2025 as work continued to rebuild a clear financial picture following the long-term consequences of the 2021 cyber attack,” he said.
“Since then, the council has been open about the challenges it faces and has taken decisive action to address them.
“This was never going to be a situation that could be resolved overnight. The issues developed over a number of years and uncovering them has required detailed work by finance officers and external auditors.
He went on to say the council has been transparent about the financial pressures it faces, including legacy budget issues, increasing service costs and the need to correct historic assumptions in several areas of the budget. And the strengthened budget monitoring arrangements only began in December 2025.
“Those processes were introduced precisely because the council recognised further improvements were needed, and they are already helping to provide greater oversight, accountability and understanding of spending across services,” Cllr Wilson said.
“Budget holders are now supported by dedicated finance officers and monthly budget reviews, giving a far stronger grip on finances than previously existed.
“This outturn report should be viewed in that context. It represents the first full-year position identified while those new controls are bedding in, not a failure of the new processes themselves.
“In fact, the improved monitoring arrangements are helping the council identify issues sooner and manage them more effectively.”
By Carmelo Garcia, local democracy reporter for Gloucestershire. carmelo.garcia@reachplc.com
*The Raikes Journal is the only independent news outlet in Gloucestershire approved to use the copy of the BBC local government reporting service. Why? Only independent, credible journalistically-led platforms that meet the BBC’s high standards win that permission.