DUDLEY Council’s auditor is considering forcing the authority to discuss even deeper cuts to stave off catastrophic financial failure.

The authority is already planning to slash spending to cover a £12m deficit in the 2024/25 budget but that may not be enough according to Grant Thornton, who reported on the council’s finances in November.

Despite proposed savings of £7.7m in the coming financial year, the council may have to make more cuts to avoid declaring a Section 114 order and becoming, in effect, bankrupt.

Andrew Smith, from Grant Thornton, told a meeting of the council cabinet on January 11: “We are concerned the risk of 114 is very high and are recommending to find an extra £2.5m after looking at the budget.”

The council’s budget is due to be finalised in early March and Mr Smith added he is considering issuing a statutory recommendation under an act of parliament.

The recommendation would force the council to discuss in public within a month how it would find the extra savings.

Cabinet member for finance, Cllr Steve Clark, told the meeting the authority is at risk of having to declare itself bankrupt within the next 12 months but he remained confident they would be able to set a legal budget in March as planned.

He went on to blame the government for cutting the amount of money It pays in a grant to the council.

Cllr Clarke said: “We have a history of low tax and low reserves, as costs rise our funds will run out. The government expects us to use up reserves we do not have.

“We have increased reserves over the last four years up to £26m, had we not done that we would be in a worse position and the council would have already gone bankrupt.”

The Conservative finance chief came under fire from his Labour opposite number who accused the administration of incompetence.

Cllr Shaukat Ali said: “Over the years budgets have been set but not delivered, we raised concerns last year about finances and the direction they were heading but we were not listened to.”

Cllr Ali went on to say senior council officers were deserting a sinking ship.

Council leader Patrick Harley said: “We have been working behind the scenes but these things take time.

“There are steps in place to avoid a 114 but it is not a quick fix. I have full confidence in our officer team from the deputy chief executive down.”

The authority’s chief executive, Kevin O’Keefe, who did not attend the full council meeting or the meeting of the audit committee in December, is currently on sick leave.

In an unusual move councillors went against the advice of finance officers and voted to override spending controls and press ahead with building a new school.

The new facility would replace Pens Meadow special school in Brierley Hill where facilities were described by cabinet member for education, Cllr Ruth Buttery, as ‘appalling’.

Cllr Harley told the meeting supporting a child with special educational needs costs between £60-90,000 per year and building the school now would bring long-term financial benefits.

Cllr Harley said: “I believe we should continue, it is the right thing to do. The financial benefits have not been taken into account with a brand new school that will be over-subscribed.”