The shadow chancellor says Labor will not bail out bankrupt councils.
“I can’t solve everything right away,” Rachel Reeves said in an interview Sky News Sunday Morning Trevor Phillips.
Her comments follow Birmingham City Council Effective declaration of bankruptcy After receiving a £760m bill for equal pay claims.
In this regard, the Council Plans approved to increase council tax by 21% £300m will be cut over the next two years.
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Asked whether she would bail out councils, allow them to raise taxes or tell them to sink or sink, Ms Reeves said: “I have no illusions about the scale of the challenge that will be faced if I become chancellor later this year .I need to be honest with people.”
She added: “My focus is on reforming the planning system to get Britain building again…
“If we do these things, we will bring in tax revenue and we will be able to invest in public services again. There are no shortcuts. That’s it.”
In an interview with Sky News, Ms Reeves also said the removal of non-resident tax status was “a complete disgrace to this government”.
She added: “It’s been 14 years since this parliament’s last budget and they’ve used this moment to close the non-domestic tax loopholes that everyone has known about for years.”
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Other councils have effectively declared bankruptcy
Several other councils have effectively declared bankruptcy, with Hackney Council issuing a Section 114 notice in 2000 and Northamptonshire Council following in 2018.
Croydon Council issued its third 114 notice in two years in November 2022. Thurrock, Essex, did the same in December 2022 after falling into trouble after borrowing large sums to invest in solar energy.
Woking issued Section 114 in June 2023, saying it had “extremely severe financial shortfalls as a result of its historic investment strategy, resulting in unaffordable borrowings, inadequate steps to repay borrowings and uncollectible loan values that were too high” .
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