Government agrees Exceptional Financial Support for Southampton City Council

On Thursday 29 February 2024, the Department for Levelling Up, Housing and Communities announced that it is minded to agree up to £121.6 million of Exceptional Financial Support for Southampton City Council

This support comes in the form of a Capitalisation Directive that will enable the council to use capital resources to cover revenue costs for the next 12 months only.

A breakdown of the £121.6 million is as follows:

• £39.3 million to offset the 2024/25 budget deficit and to enable the council to set a balanced budget on 6 March 2024
• Up to £10.6 million to cover transformation and improvement costs
• Up to £12.2 million for potential restructuring costs resulting from this transformation work
• Up to £7.5 million for potential unforeseen events that cannot be funded from the council’s limited reserves
• Up to £52 million to cover a potential equal pay claim liability. This liability is an unintended consequence of different working practices that have been in place across the organisation for a number of years, the amount of which will be determined by a full equal pay audit

The council will be subject to an external, independent review, and will need to provide the Government with a detailed transformation and improvement plan within the next six months.

Councillor Lorna Fielker, Leader of Southampton City Council said:

“I welcome this announcement and would like to thank officers for the excellent work they have done with the Government over the last few months. This support gives us time to put in place the transformation plans that will enable us to bring our budget back into line and put us on a stable footing moving forwards.”