Financial Intervention in Local Government: Crisis, Control and Choice
- truthaboutlocalgov
- Jan 16
- 36 min read
Updated: Jan 17
Beyond the headlines
In recent years, the language of local government finance has shifted sharply. Terms that were once rare, Section 114, Exceptional Financial Support, statutory intervention, are now part of everyday conversation for council leaders, finance directors and HR teams alike. Too often, however, these mechanisms are flattened into a single narrative: a council in crisis, a loss of control, and an inevitable spiral of cuts. The reality is far more nuanced.
A Section 114 notice is not the same as the appointment of commissioners. Exceptional Financial Support is not synonymous with failure. An Improvement and Assurance Panel is not a halfway house to Whitehall takeover. Each route reflects a different diagnosis of risk, a different level of confidence in local leadership, and a very different trajectory for recovery.
What is clear is that these situations rarely emerge overnight. They are the product of long‑term structural funding pressures, escalating demand for statutory services, and, in some cases, historic decisions on governance, commercial investment or technology that have compounded over time. The response, therefore, cannot be purely financial or short‑term. It requires systemic thinking about assets, operating models, culture and partnerships, alongside a clear understanding of why a council has arrived at this point in the first place.
This article explores the distinctions between the three main forms of financial and statutory intervention currently affecting English local government: commissioners appointed under the Local Government Act 1999, councils in receipt of Exceptional Financial Support with External Assurance Reviews, and statutory Improvement and Assurance Panels. It examines which councils fall into each category, what drove them there, and, crucially, the timelines involved in stabilisation and recovery.
Most importantly, it moves beyond diagnosis to ask a harder question: when this happens, what does a credible and sustainable response actually look like?
From asset management and portfolio decisions, to operating structures, technology, and partnership working, this piece argues that recovery is not about short‑term fixes, but about making deliberate, often uncomfortable choices that reset how a council operates for the long term.
This is not an account of failure. It is an exploration of what happens when financial reality collides with public service ambition, and what leaders can do when that moment arrives.
Three distinct routes into (and through) crisis
Commissioners (statutory intervention under the Local Government Act 1999)
The appointment of commissioners under the Local Government Act 1999 represents the most significant and intrusive form of statutory intervention available to the Secretary of State. This route is typically pursued where there is a determination that a council is failing to meet its Best Value Duty, that is, failing to secure continuous improvement in the way its functions are exercised, having regard to economy, efficiency and effectiveness.
When Ministers reach this conclusion, they may issue directions under section 15 of the 1999 Act and appoint one or more commissioners to oversee, challenge, or directly exercise specified council functions. In practical terms, this marks a decisive shift of confidence away from the authority’s existing governance and assurance arrangements and towards direct external control.
“The Secretary of State… has powers under section 15 of the 1999 Act to intervene… including appointing commissioners to exercise specified functions.”
It is important to note that commissioner interventions are not uniform. The scope of their powers varies by authority and is set out explicitly in the directions issued. In some cases, commissioners are appointed to exercise focused powers, for example over finance, commercial decision‑making or senior appointments. In others, particularly where failings are systemic, commissioners may be granted wide‑ranging control across governance, finance, organisational design and transformation. In practice, commissioners often:
Take control of, or must approve, key financial and strategic decisions
Oversee the development and delivery of Improvement or Recovery Plans
Intervene directly in senior officer appointments or restructures
Require significant changes to governance, scrutiny and risk management
Act as the primary interface between the council and central government
While commissioners are frequently described as “supportive”, their role is fundamentally one of direction, challenge and enforcement. Elected Members retain their democratic mandate, but their discretion is constrained. Officers remain accountable for delivery, but within a tighter and more explicitly supervised operating environment.
Crucially, the appointment of commissioners is rarely about a single failure. It usually reflects a judgement that problems are deep‑seated, cumulative, and unlikely to be resolved at sufficient pace through sector‑led or peer‑based improvement alone. In that sense, commissioners are an acknowledgement that incremental change is no longer enough.
This model of intervention is also time‑bounded but not short‑term. Most commissioner‑led recoveries run over multiple financial years, with a clear expectation that:
financial stability is restored,
governance and leadership capacity are rebuilt,
and sustainable improvement can be demonstrated without ongoing external control.
Case studies: what commissioner interventions really look like in practice
Birmingham City Council
Commissioners were appointed to Birmingham City Council in October 2023 following the issuing of a Section 114 notice that exposed a convergence of long‑running financial and organisational failures. While the equal pay liability, estimated at up to £760 million, was the most visible trigger, subsequent commissioner reports have been clear that this was not an isolated issue. Instead, the crisis reflected a broader breakdown in financial governance, ineffective risk management and a failure to confront known liabilities over an extended period.
Compounding this was the collapse of a major enterprise resource planning (ERP) implementation, which significantly undermined the council’s ability to maintain financial control, produce reliable management information and exercise effective budgetary grip. The commissioners’ second statutory report, issued in January 2025, acknowledged meaningful progress, notably in leadership appointments, improved engagement with trade unions, and a more realistic appreciation of the scale of the challenge, but also made clear that Birmingham remains on a long recovery trajectory. The path to sustainable financial stability was described as “long and demanding”, with the earliest prospect of a balanced budget without reliance on asset disposals still several years away. Birmingham illustrates how historic liabilities, governance culture and technology failure can combine to overwhelm even the country’s largest local authority.
Nottingham City Council
Nottingham’s commissioner intervention followed a different, but equally instructive, route. The Section 114 notice issued in November 2023 was driven less by commercial exposure and more by escalating demand‑led pressures, particularly in adults’ and children’s social care, homelessness and temporary accommodation, alongside inflationary cost increases and persistent transformation under‑delivery. These pressures eroded the council’s financial resilience over time, leaving limited headroom when in‑year overspends materialised.
Commissioners were appointed with a strong focus on restoring leadership capacity, financial grip and organisational discipline. The second progress report, published in March 2025, places significant emphasis on a near‑complete reset of the senior leadership team, revised governance arrangements and a clearer, more credible financial recovery plan. Nottingham highlights a critical point: commissioner intervention is not confined to councils that have pursued high‑risk commercial strategies.
It may equally arise where structural service pressures are not matched by the pace of organisational change required to manage them.
Slough Borough Council
Slough has been under statutory intervention since December 2021, following severe financial and governance failures linked to debt‑fuelled commercial activity and weak internal controls. Unlike some newer interventions, Slough demonstrates the longevity of commissioner oversight where issues are deep‑rooted. Directions have been extended multiple times, and the sixth commissioners’ report, published in July 2025, confirms that while there has been genuine progress, particularly in leadership stability and governance maturity, the council has not yet reached a position where control can be fully returned.
The Slough experience underlines that recovery is not linear. Improvements in systems and behaviours must be sustained over time before ministers are satisfied that Best Value compliance is embedded. The presence of commissioners for four years and counting illustrates how long it can take to rebuild trust once it has been lost.
Thurrock Council
Thurrock’s intervention stems principally from historic investment decisions that exposed the council to significant financial losses, combined with governance and scrutiny failures that allowed risk to accumulate unchecked. The scale of the exposure, and the limitations of the council’s assurance mechanisms, led to statutory intervention being viewed as unavoidable.
What distinguishes Thurrock is the emphasis commissioners and the department have placed on rebuilding risk awareness, transparency and internal challenge alongside financial recovery.
The case reinforces a recurring theme across interventions: it is often the governance failure around decision‑making, not simply the decision itself, that tips a council into statutory intervention.
Woking Borough Council
Woking represents perhaps the most extreme example of commercial and borrowing exposure within the current cohort of interventions. Commissioners were appointed in May 2023 after it became clear that the council’s level of debt, running into billions, was wholly disproportionate to its revenue base, and that embedded commercial structures were unsustainable.
The fourth commissioners’ report, issued in December 2024, describes an organisation still in the early stages of unwinding historic decisions. While governance, budget discipline and risk management have improved markedly under commissioner oversight, the report is clear that resolution of Woking’s position will require a multi‑year horizon and sustained engagement with central government on issues such as Minimum Revenue Provision and exceptional financial support.
Woking illustrates that some interventions are less about recovery to a previous state and more about managed retreat to a minimum viable local authority operating model.
Warrington Borough Council, Tower Hamlets and Spelthorne Borough Council
In addition to the high‑profile financial cases, several councils, including Warrington, Tower Hamlets and Spelthorne, appear on the government’s live statutory interventions register. These interventions are not identical in nature, but they share a common thread: serious concerns about compliance with the Best Value Duty, often linked to governance, decision‑making culture, and the effectiveness of internal assurance rather than immediate insolvency risk. Their inclusion serves as an important reminder that statutory intervention is not reserved solely for councils issuing Section 114 notices. It can also arise where ministers judge that underlying weaknesses, left unaddressed, would likely lead to future failure.
Taken together, these cases underline an important distinction: commissioners are not simply about financial distress. They are about confidence, specifically, whether Ministers believe a council can realistically diagnose its own problems and deliver recovery at the pace required to protect public services and the public purse.
For councils under commissioner intervention, the challenge is therefore not only to stabilise the balance sheet, but to demonstrate capability, grip and credibility, so that, in time, control can be handed back and democratic leadership fully restored.
EFS / EAR (Exceptional Financial Support with External Assurance Review) – no commissioners
The Exceptional Financial Support (EFS) route sits between sector‑led improvement and full statutory intervention. It is typically pursued where a council faces acute and immediate financial pressure, often an in‑year or medium‑term budget gap that cannot realistically be closed through local measures alone, but where Ministers conclude that formal commissioner appointment is neither proportionate nor necessary at that stage.
In most cases, EFS takes the form of a capitalisation direction, allowing a council to treat certain revenue pressures as capital expenditure. This provides short‑term financial headroom, enabling budgets to be set lawfully and services to continue, while longer‑term recovery plans are developed. However, this flexibility is not granted without conditions. It is increasingly accompanied by a published External Assurance Review (EAR), led by the Chartered Institute of Public Finance and Accountancy (CIPFA), often supported by Grant Thornton and other specialist partners. This combination reflects a clear shift in government approach: support is conditional on transparency, diagnosis and demonstrable improvement, even where local democratic control is retained.
“In the financial year 2024–25 the government agreed to provide 19 councils with support… This page will be updated with final capitalisation directions and associated assurance reviews.”
The EFS / EAR model therefore tightens external scrutiny without transferring powers away from elected members or senior officers. There are no commissioners directing day‑to‑day decisions, but councils are operating under heightened visibility, with their financial sustainability, governance and delivery capacity subject to independent evaluation and public reporting.
Who this applies to
For 2024–25, the cohort of councils receiving EFS includes (with differing levels of support and varying coverage of prior years):Birmingham, Bradford, Cheshire East, Croydon, Cumberland, Eastbourne, Havering, Medway, Middlesbrough, North Northamptonshire, Nottingham, Plymouth, Slough, Somerset, Southampton, Stoke‑on‑Trent, Thurrock, West Northamptonshire and Woking. Finalised figures and conditions are published via the GOV.UK tracker and updated over time.
Importantly, this is a highly heterogeneous group. Some authorities narrowly avoided issuing a Section 114 notice; others are already under separate statutory interventions (such as Croydon or Slough); others again face structural pressures rather than legacy governance failure. The presence of a council on the EFS list is therefore not, in itself, a definitive marker of institutional failure. Rather, it signals insufficient short‑term financial resilience against a backdrop of wider system stress.
What the External Assurance Reviews actually examine
The External Assurance Reviews commissioned alongside EFS are not audits in the traditional sense, nor are they limited to narrow financial compliance. Instead, they take a holistic, systems‑based view of a council’s ability to achieve and sustain financial stability. Reviews typically focus on four inter‑related domains:
Financial management and sustainability – including medium‑term financial planning, reserves strategy, budget discipline and savings delivery
Capital, assets and commercial arrangements – assessing debt, asset management strategy, capital programme realism and exposure to commercial risk
Governance and leadership – including decision‑making quality, member–officer relationships, scrutiny, audit and challenge
Service delivery and transformation capacity – particularly where demand‑led services or stalled transformation programmes are driving overspends
A recent example is the Medway Council External Assurance Review (September 2024), which assessed not only whether Medway’s request for EFS was justified, but whether the council had credible plans and organisational capacity to stabilise its position over the medium term. The review explicitly linked financial risk to workforce capacity, leadership grip and the delivery confidence of savings and transformation programmes, demonstrating how far assurance expectations have evolved beyond traditional finance functions.
What this route signals politically and organisationally
The absence of commissioners does not mean the absence of consequence. Instead, the EFS / EAR route reflects a delicate balancing act by government: maintaining local democratic leadership while asserting system‑wide financial discipline.
For councils, this creates a distinctive operating environment:
Local leaders remain fully accountable for decisions and delivery
Recovery plans must withstand external, expert scrutiny
Assumptions on asset disposals, transformation savings and demand reduction are explicitly tested
Progress (or lack of it) is visible to Ministers and published in the public domain
In several recent cases, EAR findings have served as a pivot point, either providing confidence that a council can recover under its own leadership, or laying the groundwork for potential escalation if risks are not addressed at pace.
Learning from the first wave of EFS reviews
CIPFA has since published cross‑cutting insights drawn from 12 External Assurance Reviews conducted as part of the EFS regime. These findings are particularly instructive because they highlight recurring patterns, not isolated failures. Common issues identified include:
Over‑optimistic savings plans and weak delivery assurance
Insufficient capacity within finance and programme management functions
Poorly rationalised asset portfolios and unclear disposal strategies
Inconsistent governance and challenge, particularly between election cycles
Transformation plans that exceeded organisational bandwidth
Equally, the recommendations are strikingly pragmatic rather than radical. They frequently focus on strengthening audit and scrutiny, clarifying accountability, investing in financial capability, and simplifying operating models, reinforcing the idea that many councils in receipt of EFS are facing evolutionary rather than revolutionary change requirements.
Why EFS should not be misunderstood
Perhaps the most important point is this: EFS is not a solution in itself. Capitalisation does not eliminate the underlying cost pressures associated with adult social care, children’s services, homelessness or inflation. Nor does it resolve historic debt or governance weaknesses. Instead, it buys time and space, and that time is expected to be used decisively.
In that sense, EFS represents both a lifeline and a test. Councils that use the opportunity to confront asset affordability, reshape services and restore financial grip may return to sustainability without further intervention. Those that do not risk moving, incrementally but inexorably, towards statutory escalation.
Improvement & Assurance Panel (I&A Panel) – statutory panel oversight
The Improvement and Assurance Panel (I&A Panel) represents a deliberate middle ground in the spectrum of government intervention: more formal and authoritative than sector‑led support, but materially less intrusive than the appointment of commissioners. It is typically used where Ministers believe problems are deep‑rooted and persistent, yet not so advanced that executive powers must be removed from elected Members and senior officers.
Under this model, the Secretary of State places an existing improvement panel on a statutory footing under the Local Government Act 1999. This is achieved through the issuing of directions which require the council to engage fully with the panel, respond to its recommendations, and demonstrate progress against clearly defined priority areas. Crucially, howeverthe panel does not run the authority. Instead, it provides independent oversight, challenge and assurance, reporting directly to central government at regular intervals.
“On 20 July 2023…the Secretary of State… moved the existing Improvement and Assurance Panel to a statutory footing… strengthening the panel’s remit.”
The phrase “lighter touch” should not be confused with low impact. While an I&A Panel does not exercise day‑to‑day control, its influence is significant. Panel reports are published, shared with Ministers and Parliament, and used as a primary evidence base for decisions about continued financial support, further directions, or escalation to statutory takeover. In practice, this creates an environment of sustained external scrutiny combined with intense internal pressure on leadership to deliver tangible improvement.
How I&A Panels operate in practice
Statutory panels are typically composed of experienced former senior local‑government figures with complementary expertise, often finance, governance, housing or transformation. Their role usually includes:
- Testing the realism of recovery and improvement plans
- Assessing whether governance, scrutiny and audit arrangements are genuinely improving
- Tracking delivery of savings, transformation and service reform
- Providing frank commentary on leadership grip, culture and organisational capacity
- Flagging emerging risks to Ministers, including where progress is stalling
Unlike peer reviews or informal support, I&A Panels have longevity and continuity. They observe not just plans and commitments, but whether change is sustained over time, including through budget cycles, leadership changes and political pressure.
Croydon: the defining example
The London Borough of Croydon remains the most prominent and instructive example of statutory panel oversight in the current landscape. Following a series of governance failures, commercial missteps and multiple Section 114 notices, Croydon initially operated under a non‑statutory improvement panel from 2021. While progress was evident, financial fragility and the risk of regression remained high.
In July 2023, Ministers concluded that further reinforcement was necessary and placed the panel on a statutory footing. This decision reflected a nuanced judgement: Croydon had shown sufficient openness to challenge and capacity to improve to retain democratic control, but not enough to be left without formal external oversight.
Since then, the panel has produced a series of detailed and increasingly reflective reports. These documents do more than record activity; they assess pace, quality and sustainability of change, and are explicit about where confidence is strengthening and where it remains fragile. The ninth report, published in April 2025, is particularly notable for its long‑view assessment of cultural and structural reform, acknowledging improved leadership grip while continuing to highlight the council’s precarious financial position.
Crucially, throughout this period, Ministers have repeatedly stated that Croydon’s position remains under active review. The Department has been explicit that it retains the option to issue further directions or escalate the form of intervention if improvement stalls or risks re‑emerge. This reinforces the I&A Panel’s role as not merely advisory, but conditionally enabling.
The strategic purpose of the I&A Panel model
The statutory panel model is best understood as a test of self‑directed recovery under pressure. It preserves local autonomy, but places it under a microscope. Councils retain responsibility for difficult decisions, on assets, services, workforce and budgets, but must demonstrate that they can act decisively, consistently and credibly.
This has important consequences for leadership behaviour:
There is limited room for optimistic assumptions or delayed decision‑making
Progress must be evidenced, not promised
Cultural issues, such as member–officer relationships and openness to challenge, become central, not peripheral
For central government, the model provides assurance without immediately incurring the democratic and political costs associated with commissioners. For councils, however, it represents a narrow bridge: demonstrate grip and regain confidence, or face escalation.
What this tells us about timelines and risk
Croydon’s experience underscores a critical lesson: statutory panel oversight is not short‑term. The journey from initial failure to restored confidence can span many years, even where progress is genuine. Panels observe patterns over time, not one‑off improvements, and are explicitly designed to detect regression. Equally, the presence of an I&A Panel means that time is not neutral. The expectation is not simply that things will improve eventually, but that they will do so at the pace required to protect financial sustainability and public confidence. Where that pace is not evident, escalation is not a failure of the model, it is its intended function.
Why this route matters
The Improvement and Assurance Panel is arguably the most revealing form of intervention, because it sits at the boundary between trust and control. It reflects a judgement that leadership capability exists, but must still be proven. For other councils, it provides a clear warning: retaining autonomy depends not on reassurance or intent, but on demonstrable, sustained delivery.
In that sense, the I&A Panel is not a softer alternative to commissioners, but a different test altogether, one that measures whether a council can truly govern itself back to stability under sustained external scrutiny.
How the three routes compare at a glance
Why this matters: the right mental model helps leaders set tone, pace and priorities. These routes are not interchangeable: each reflects a different judgement about confidence, control and capability.
A. Comparison table
Dimension | Commissioners (LGA 1999) | EFS / EAR (no commissioners) | Improvement & Assurance Panel (statutory) |
Core purpose / threshold | Used where the SoS judges Best Value failure and insufficient confidence that the council can self‑correct; powers transferred or reserved to commissioners. (Statutory s.15 LGA 1999 directions) | Used when a council has acute financial pressure needing short‑term headroom but retains sufficient leadership confidence. Capitalisation direction often paired with a published External Assurance Review (EAR). | Used where challenges are serious and systemic, but Ministers still see potential for self‑directed recovery under statutory panel oversight (no powers taken). |
Who makes decisions | Commissioners can direct or exercise specified functions; Member/officer discretion is constrained by directions. | The council retains control, but with tighter external scrutiny; plans and assumptions tested by CIPFA‑led EAR published on GOV.UK. | Council retains control, but must co‑operate with the Panel; Panel reports to Ministers and can recommend escalation if progress stalls. |
What external products look like | Commissioners’ letters/reports set milestones, savings, asset strategies, governance resets; directions specify powers. | Capitalisation direction + EAR with findings & recommendations across finance, capital/commercial, governance, and service transformation. | |
Typical duration | Multi‑year (often 2–4+), until confidence in sustainable Best Value compliance is restored. | 1–2 budget cycles typical for headroom; can repeat if structural issues persist. Duration influenced by EAR findings and delivery pace. | Sustained oversight (often 1–3+ years), with regular Panel letters; position kept under ministerial review. |
Finance levers | Programme‑level savings and asset disposal tests; may run alongside EFS; strong grip on MTFP and reserves strategy. | Capitalisation direction (using capital resources to cover revenue) + asset plan + savings. Not a long‑term funding solution. | No direct finance levers; assurance and challenge drive the council’s own MTFP, savings and transformation delivery. |
Escalation / de‑escalation | Can de‑escalate to panel or exit if sustained improvement; can intensify directions if delivery slips. | If delivery falters or risks widen, can escalate to panel or commissioners; if confidence grows, EFS can end after a cycle. | Explicit readiness to escalate to directions/commissioners; can step down to sector‑led support when confidence is restored. |
Representative examples (2023–25) | Birmingham, Nottingham, Slough, Thurrock, Woking (plus others on the DLUHC live list). | 2024–25 EFS cohort (19) including Birmingham, Bradford, Croydon, Medway, Nottingham, Slough, Somerset, Southampton, Stoke‑on‑Trent, Thurrock, Woking (varying prior‑year support). | Croydon statutory I\&A Panel: multiple panel letters; ninth report Apr 2025; status under review. |
Choosing the right route: leadership implications
Commissioners (deepest intervention).
Expect a hard reset of governance, financial grip and programme discipline; rapid asset strategy decisions; and clear, cash‑backed savings with PMO tracking. Leaders must show delivery under direction, rebuild confidence through evidence, and institutionalise risk management so improvement survives leadership churn.
EFS/EAR (support with scrutiny).Treat capitalisation as time‑limited oxygen, not funding. Use the EAR as a blueprint: strengthen the corporate core (finance, PMO, procurement, risk), right‑size the estate, and lock in realistic savings with line‑of‑sight to service outcomes. CIPFA’s cross‑cutting insights are a ready‑made checklist for capacity, governance and savings realism.
I\&A Panel (conditional trust).Panels test whether local leadership can govern itself back to stability under pressure. Success requires evidenced pace (not promises), visible Member–officer alignment, and repeatable delivery rituals. Failure to maintain momentum commonly triggers escalation.
Early warning indicators (seen repeatedly across cases)
MTFP implausibility (structural gaps; savings without delivery plans) and reserves dependency.
ERP/finance system instability and weak management information (undermines grip).
Demand‑led overspends (ASC, Children’s, TA) without credible mitigation plans.
Commercial/capital exposure mis‑matched to revenue base; opaque company governance.
A pragmatic decision path
Is a lawful budget unachievable without temporary headroom?
→ Yes: pursue EFS (capitalisation) with EAR, publish recovery plan aligned to EAR recommendations.
Are there credible plans, capacity and governance to execute at pace?
→ Yes: stay on EFS/EAR route, evidence quarterly progress; No: expect I\&A Panel (statutory oversight).
Is there continuing Best Value failure (systemic governance/finance breakdown, stalled delivery)?
→ Yes: Commissioners with targeted or wide‑ranging powers.
One‑line takeaway
Commissioners = control when confidence is lost.
EFS/EAR = headroom with hard scrutiny to prove recovery.
I\&A Panel = conditional trust, deliver, or escalate.
Implications for leadership: what changes when intervention enters the room
Financial intervention, whether through commissioners, Exceptional Financial Support, or a statutory Improvement & Assurance Panel, fundamentally reshapes what leadership looks like in a local authority. Titles remain the same, constitutional roles technically endure, but the context within which leadership is exercised changes profoundly. Decision‑making accelerates, tolerance for ambiguity collapses, and the distance between governance, finance and service delivery narrows dramatically.
The common thread across all three models is this: leadership behaviour becomes as important as leadership structure.
For elected Members and councillors: from advocacy to stewardship
For councillors, intervention often exposes a tension that exists even in stable times but becomes unavoidable under scrutiny: the tension between advocacy and stewardship. The presence of external assurance, whether commissioners’ directions, a statutory panel or a published assurance review, signals that the system is no longer willing to absorb risk generated by optimistic assumptions or unresolved trade‑offs. Under these conditions:
Collective responsibility outweighs individual portfolio or ward interests
Decisions are judged less on political intent and more on financial consequence and deliverability
The discipline of scrutiny becomes central rather than peripheral
Councillors are not sidelined in these arrangements, but the space for “business as usual” narrows significantly. Repeatedly, intervention reports emphasise the importance of members understanding finance, risk and transformation, because in moments of financial fragility, poor decisions compound faster than good intentions can offset them.
For political leaders: grip, pace and consistency
For council leaders and cabinets, intervention tests three things relentlessly: grip, pace and consistency.
Grip is about understanding the organisation as it actually is, not as it is presented in reports. Pace is about matching the speed of decision‑making to the urgency of the position, even when those decisions are uncomfortable. Consistency is about holding course through political pressure, media scrutiny and internal resistance. One of the clearest patterns across commissioner reports, EFS assurance reviews and panel letters is criticism not of bad decisions, but of delayed decisions. Leaders who hesitate, seeking consensus where clarity is required, often find that the space for choice shrinks as intervention deepens. Conversely, where leaders demonstrate sustained grip and consistent follow‑through, confidence gradually returns, even if the financial challenge remains severe.
For Chief Executives: authority without illusion
For Chief Executives, intervention strips leadership back to its essentials. Formal authority remains, but influence must be earned daily, upwards with Ministers, Members and panels; outwards with partners; and inwards across an organisation often fatigued by repeated change.
In this context, the Chief Executive’s role becomes less about organisational harmony and more about:
Clarity of priorities, even at the cost of short‑term discomfort
Building an honest relationship between political ambition and organisational capacity
Ensuring the organisation confronts reality early, rather than allowing risk to accumulate
Chief Executives operating under intervention often speak privately of the burden of visibility: every assurance, every slippage, every hesitation is observed. But that visibility can also be an asset. Where Chief Executives use it to reset culture, normalising challenge, surfacing risk, and simplifying decision‑making, it creates the conditions for recovery that endure beyond the intervention itself.
For senior officers and statutory roles: accountability intensifies
For statutory officers, particularly Section 151 Officers, Monitoring Officers and Heads of Paid Service, intervention sharpens accountability in a very tangible way. Assurance reviews and panels repeatedly stress that financial management, governance and organisational capacity are inseparable. A technically balanced budget that cannot be delivered is treated as a failure, not a success. This has several implications:
Finance professionals must operate as organisational leaders, not just technical guardians
Legal and governance advice must be timely, visible and unequivocal
Transformation and savings programmes require line‑of‑sight accountability, not diffuse ownership
Under intervention, ambiguity becomes risk. Officers are expected to be explicit about what is feasible, what is not, and what trade‑offs are unavoidable. In several cases, external oversight has been triggered not by ignorance of risk, but by a failure to articulate and escalate that risk clearly enough internally.
A shared reality: culture matters more than structure
Perhaps the most striking common finding across all three intervention models is the emphasis placed on organisational culture. Again and again, external reviewers return to the same themes:
Defensive behaviours that suppress bad news
Fragmented leadership where no one owns the whole system
Exhausted organisations trying to do too much with too little
Structural reform, new committees, revised schemes of delegation, refreshed strategies, only takes hold where culture allows it to. Conversely, where leaders model openness, pace and accountability, structural change follows more naturally.
What this means in practice
For leaders at every level, intervention changes the question from “what do we want to do?” to “what must we now do to remain viable?”. It rewards realism over rhetoric and delivery over aspiration. It also leaves a lasting imprint: councils that emerge strongest from intervention are often those whose leaders use the moment not merely to stabilise finances, but to relearn how to lead under constraint.
Seen in this light, intervention is not simply a financial mechanism. It is a stress test of leadership itself, exposing habits, assumptions and cultures that were often invisible in more benign times.
Which councils have issued Section 114 notices?
(Context for the intervention routes that follow)
Between 2018 and 2023, a small but growing number of English local authorities issued Section 114 notices, the legal mechanism available to a council’s Section 151 Officer when projected expenditure is likely to exceed available resources, or where unlawful expenditure is at risk.
The councils that issued Section 114 notices during this period include:
Northamptonshire County Council (2018, twice)
London Borough of Croydon (2020 and again in 2022)
Slough Borough Council (2021)
Thurrock Council (2022)
Woking Borough Council (June 2023)
Birmingham City Council (September 2023)
Nottingham City Council (November 2023)
Several of these authorities have since transitioned into Exceptional Financial Support, statutory Improvement & Assurance Panels, or the appointment of commissioners, illustrating that Section 114 is often not an endpoint, but a trigger for wider system engagement.
Section 114 as a mechanism, not a verdict
Despite the language often used in public debate, a Section 114 notice is not a declaration of insolvency or “bankruptcy”. Local authorities in England cannot legally go bankrupt. Instead, the notice functions as a statutory circuit‑breaker, halting all new non‑essential spending and forcing political and managerial leadership to confront an immediate breach of financial law.
The Institute for Government (IfG) has consistently emphasised this distinction, noting that Section 114 is best understood as a warning system, not a mark of failure in itself. In most cases, councils issuing a notice are already well into a period of financial distress; the notice simply makes that position explicit and unavoidable.
What the list tells us, and what it does not
At first glance, the relatively small number of Section 114 notices issued between 2018 and 2023 might suggest that these councils represent exceptional cases. However, when examined more closely, the list reveals common structural characteristics rather than outliers:
Most had been operating for several years with narrowing financial margins, high demand‑led service pressures and weakening reserves
Many carried historic liabilities or risky decisions that were known but unresolved (commercial investments, equal pay claims, accounting treatments, capital financing strategies)
In almost every case, the Section 151 Officer acted after other mitigations had already been exhausted
Equally important is what the list does not show. It does not capture the large cohort of councils that have:
Required repeated capitalisation directions without issuing a Section 114
Publicly warned of being “close to Section 114”
Narrowly avoided formal notices through one‑off measures
In that sense, the published S114 list represents only the tip of the financial distress iceberg within local government.
Why timing matters
The clustering of notices in the early 2020s is not coincidental. Several factors converged during this period:
A decade of real‑terms funding constraint
Climbing demand in adults’ and children’s social care and homelessness
Inflationary shocks affecting contract costs, temporary accommodation and pay awards
The delayed crystallisation of historic risks following years of suppressed spend or accounting deferrals
By the time Section 114 notices were issued in Birmingham, Woking and Nottingham in 2023, they reflected systemic strain rather than sudden collapse. In each case, the notice marked the moment when accumulated pressures could no longer be balanced through internal flexibilities.
Section 114 as a gateway, not a destination
Perhaps the most critical insight is this: issuing a Section 114 notice does not determine what type of intervention follows. Some councils move into commissioner‑led intervention; others receive Exceptional Financial Support with an External Assurance Review; others operate under statutory panel oversight or enhanced departmental engagement. The route taken depends on confidence, not just cash:
Confidence in leadership’s grip on the organisation
Confidence in governance, transparency and decision‑making
Confidence that recovery can be delivered at the necessary pace
This is why Section 114 should be read primarily as context, not categorisation. Two councils issuing notices in the same year may experience entirely different post‑S114 journeys depending on their governance maturity, organisational capacity and openness to challenge.
Why the Institute for Government framing matters
Throughout this landscape, explanatory work by the Institute for Government remains one of the most reliable guides for practitioners, Members and commentators alike. Its analysis consistently corrects three common misconceptions:
That Section 114 equals bankruptcy
That issuing a notice is always evidence of failure rather than compliance with duty
That capitalisation or asset sales are sustainable long‑term solutions
By framing Section 114 as part of a broader system of financial controls, and not as a binary judgement on competence, the IfG helps anchor debate in mechanism rather than melodrama. This perspective is essential when considering what should happen after a notice is issued, and why some councils recover local control more quickly than others.
The wider lesson
Taken together, the pattern of Section 114 notices between 2018 and 2023 reinforces a central theme of this article: financial crisis in local government is rarely sudden, rarely isolated, and never purely financial. Section 114 marks the point at which pressures become legally undeniable, but the causes sit years earlier, and the consequences play out across governance, leadership and culture long after the notice itself has passed.
What drove each council into difficulty?
(Root causes and ‘signature’ issues)
Although each council’s circumstances are shaped by local context, decisions and history, the evidence from Section 114 notices, external assurance reviews and commissioner reports points consistently to three interlocking clusters of causation:
Legacy governance and assurance failures – weak scrutiny, over‑optimistic budgeting, poor risk visibility and delayed intervention.
High‑risk commercial strategies and unaffordable debt – particularly where borrowing was disconnected from the scale of the revenue base or organisational capacity.
Structural demand and cost pressures – most notably adults’ and children’s social care, homelessness and temporary accommodation, SEND, and inflation, often exacerbated by under‑delivery of transformation.
Rarely does a single factor operate alone. In almost every case, it is the interaction between system‑wide pressure and local failure to adapt at pace that proves decisive.
Birmingham City Council
Birmingham’s Section 114 notice in September 2023 exposed one of the most complex financial crises seen in modern local government. While the headline figure was an equal pay liability estimated at up to £760 million, commissioner reports and subsequent scrutiny have been explicit that this was only one element of a much wider failure of financial governance.
“The s114 notice contained two figures… an in‑year overspend of £87m and a projected £760m equal pay liability… on top of a £375m budget gap in 2024/25 with no savings identified.”
Compounding this position was the collapse of a major ERP/Oracle implementation, which undermined the council’s ability to maintain basic financial control, produce reliable management information and manage risk proactively. Commissioners later described “disingenuous and dysfunctional budgeting” and a “fundamental inability to identify and mitigate strategic risk”. Birmingham illustrates how long‑known liabilities, technology failure and cultural reluctance to confront reality can converge into systemic crisis.
Woking Borough Council
Woking represents perhaps the clearest example of the risks associated with commercial over‑reach. The council pursued large‑scale regeneration and investment schemes, most notably Victoria Place and Sheerwater, funded through extensive borrowing that far exceeded the scale of its income base.
By mid‑2023, Woking’s financial position had deteriorated to the point where it faced a £1.2 billion deficit against core funding of just £16 million for 2023/24. Independent reviews concluded that the borrowing was fundamentally unaffordable and that governance arrangements had been insufficient to control escalating risk. The subsequent appointment of commissioners reflects not simply poor outcomes, but a mismatch between ambition, capability and financial reality.
Slough Borough Council
Slough’s difficulties stem from a combination of historic governance weaknesses, high levels of debt and inadequate financial controls over many years. By the time it issued a Section 114 notice in 2021, debt exceeded £700 million, with limited evidence that risks were being fully understood or mitigated.
Commissioners appointed to Slough have repeatedly emphasised that recovery depends not just on balancing budgets, but on deep‑seated cultural and structural change, including clearer accountability, improved scrutiny and a stronger corporate centre. The extension of intervention underlines how deeply embedded these issues were, and how long it can take to rebuild confidence once governance failures are exposed.
Thurrock Council
Thurrock’s intervention followed catastrophic losses linked to high‑risk financial investments, which left the council exposed to severe financial shocks. More than the losses themselves, the government concluded that the authority had failed in its Best Value Duty, particularly in how risk was assessed, recorded and challenged. The Thurrock case illustrates a recurring lesson: investment failure alone does not trigger intervention; it is the inability of governance systems to surface and respond to that failure in time that leads to statutory action.
Nottingham City Council
Nottingham’s case contrasts sharply with councils driven into crisis by commercial exposure. Its Section 114 notice in November 2023 was explicitly linked to demand‑led pressures and cost escalation rather than historic investment decisions.
“Key drivers… Adult and Children’s social care volume and complexity, temporary accommodation, inflation, pay awards and income shortfalls.”
The inability to contain rising costs in core statutory services, combined with income pressures and the slippage of planned transformation savings, gradually eroded the council’s financial resilience. Nottingham demonstrates that even without speculative borrowing, councils can reach a point of financial failure if structural demand significantly outpaces the organisation’s capacity to redesign services and control cost.
Croydon Council
Croydon’s financial collapse is the product of long‑running governance and financial shortcomings, compounded by an aggressive commercial strategy and excessive borrowing during the 2010s. Repeated external reviews highlighted weaknesses in risk management, financial planning and leadership grip.
“Historic issues… precarious financial position… commercial investment and residential development… S114 in November 2020… Exceptional Financial Support of £70m (2020/21), £50m (2021/22) and £25m (in principle) for 2022/23.”
Croydon’s subsequent journey, from non‑statutory improvement panel, to statutory Improvement & Assurance Panel, alongside repeated EFS, illustrates how failure to resolve underlying causes early can entrench long‑term dependency on external intervention.
System‑level pressures: the brittle baseline
Overlaying all of these local factors is a shared national context. Analysis by the House of Commons Library, Institute for Government and the New Statesman consistently points to:
Significant real‑terms reductions in central government funding since 2010
A sharp rise in demand and unit costs for statutory services
Reduced flexibility to absorb shocks, due to depleted reserves
These pressures have created what might best be described as a brittle financial baseline. In such an environment, governance weaknesses, poor commercial decisions or stalled transformation programmes are no longer absorbable risks, they become existential threats.
The deeper lesson
Across all cases, the lesson is not that these councils were uniquely profligate or reckless. It is that financial resilience in local government has become increasingly unforgiving. Where leadership, governance and organisational capacity do not evolve at the same pace as financial and service pressures, failure accelerates rapidly. Understanding these root causes is essential, because it reframes Section 114, EFS and intervention not as punishments, but as signals, signals that the gap between what councils are expected to do and what they are resourced and structured to deliver has become unsustainable without fundamental change.
Timelines: how fast do these things unfold?
Trigger – external audit/public interest report, best value inspection, or an acute in‑year gap → s114 → immediate spending controls and 21‑day council meeting.
Within months – council either stabilises with EFS (and EAR) or government escalates to statutory intervention (I\&A Panel or Commissioners) under the 1999 Act.
Multi‑year – improvement journeys typically run 2–5 years. Birmingham’s commissioners described a “long and demanding path to stability” and identified milestones stretching into 2026/27 for a sustainably balanced budget without asset‑sale proceeds.
Woking commissioners’ fourth report (Dec 2024) similarly speaks to fundamental change still in progress and dependency on EFS/MRP arrangements as historic debt is worked through.
Croydon’s statutory I\&A Panel published nine reports by April 2025, with ministers reserving the right to escalate to directions.
So what should leaders do when crisis hits? A practical response playbook
Even though root causes vary, the operational response patterns are strikingly consistent across reviews, panel letters and commissioners’ reports.
Asset management: be disciplined, no “fire sales”, but be honest about affordability
Triage the portfolio: separate operational core (statutory/mission‑critical), non‑core operational, investment/commercial, surplus/disposable. Assess lifecycle costs, backlog, utilisation, net revenue and social impact.
Avoid value destruction: legal commentary urges councils to resist panic disposals and to structure disposals to preserve value (clawbacks, overage, JV structures) while protecting statutory service footprints.
Reality‑check affordability: several interventions explicitly question whether councils can afford their operational estate without radical rationalisation and modern utilisation (civic offices, depots, libraries) aligned to new ways of working. Croydon’s panel and Birmingham’s commissioners both link estate rationalisation to financial sustainability and service redesign.
“Release £500m in assets over 12 months, then a further £250m the subsequent year” (Birmingham commissioners’ first public report commentary), illustrating the scale sometimes required.
Structures and operating model: strengthen the corporate core and clarify accountability
Rebuild the “centre”, finance, commercial, procurement, PMO and risk, before pursuing wider transformation. Birmingham’s commissioners highlight the need for a “strong corporate core built on a competent and permanent team.”
Member–officer protocols, audit and scrutiny must be tightened and lived. Slough’s commissioners call out the need for improved internal audit follow‑through and evidence‑based reports; Croydon’s panel ties exit to demonstrable best‑value compliance.
Leadership stability matters: Nottingham has overhauled its top team and embedded an Improvement Plan with Commissioner‑led governance boards.
Technology and data: fix the plumbing first
Stabilise finance/ERP platforms to regain control of the books, before automating or pursuing analytics. Birmingham is re‑implementing Oracle alongside a new income management system to restore financial control.
Digital value comes from costed, staged business cases (e.g., cloud contact centre, robotic process automation for revenues/benefits), tied to cashable savings monitored by the PMO, an explicit commissioner expectation in several places.
Go after the root cause with partners
If ASC/Children’s/SEND/TA are the pressure points, the answer isn’t only fiscal.
Adults & Children: integrate with NHS partners, adopt strengths‑based practice and demand‑management (reablement; edge‑of‑care).
Temporary accommodation: assertive prevention, PRS access, and pipeline of cost‑effective supply, cited repeatedly by sector bodies as core to bending the cost curve.
Capitalisation is not a strategy. IfG makes this plain: capitalisation directions and asset sales can bridge, but are not sustainable for service funding.
CIPFA’s assurance reviews emphasise practical steps: independent audit‑committee chairs, finance training for members and officers, clearer savings delivery governance, and capacity uplift in the finance function.
A quick side‑by‑side: what leaders should expect in practice
While commissioners, Exceptional Financial Support, and Improvement & Assurance Panels are often discussed as technical mechanisms, for those leading councils the differences are experienced most clearly in how decisions are made, how quickly expectations change, and how visible progress must be. Each model carries distinct implications for leadership, autonomy and organisational tempo.
Commissioners: control, pace and irreversible decisions
Commissioner intervention is the deepest and most directive form of oversight. It is used where Ministers have concluded that the combination of financial distress, governance weakness and organisational capacity means the council cannot recover at the necessary pace without external control. In practical terms, leaders should expect:
Named commissioners with authority to exercise specified functions directly or to veto decisions
Formal directions setting out what must change, by when, and how progress will be tested
A non‑negotiable focus on hard, cash‑backed savings, not aspirational efficiencies
A high likelihood of significant asset strategy decisions, often involving the disposal of major holdings
Central programme management discipline, with milestones tracked in public commissioner reports
While interventions are formally time‑limited, most commissioner‑led recoveries run over two to four years, and sometimes longer where liabilities or debt are severe. What distinguishes this route is not simply the scale of change, but the loss of discretion. Leaders continue to carry responsibility, but no longer control the terms of recovery. For senior leadership teams, commissioner involvement creates a high‑pressure environment in which delayed or partial delivery is quickly escalated, and cultural resistance becomes a material risk. Exit is possible, but only once confidence is restored not just in finances, but in governance, behaviour and organisational grip.
EFS plus External Assurance Review: headroom with scrutiny
The EFS route offers councils time and financial headroom, but not permission to defer difficult decisions. Capitalisation directions allow immediate pressures to be managed lawfully, but are accompanied by explicit expectations about the pace and quality of recovery.
Under EFS with an External Assurance Review, leaders should expect:
Continued full control over decisions, but within clearer constraints
A published, independent diagnosis of root causes, not just financial gaps
Specific and actionable recommendations on finance, governance, assets and delivery capacity
Ongoing engagement with the department, often tied to budget cycles or further tranches of support
This model works best where problems are acute but not systemic, for example, where demand‑led pressures or one‑off shocks have overwhelmed an otherwise functioning organisation. The external review acts as both a mirror and a roadmap, testing whether leadership is being realistic about what can be delivered. Critically, EFS is not neutral time. Where councils fail to act decisively on review findings, particularly around asset affordability, workforce capacity or savings realism, EFS can quickly become a precursor to escalation rather than an alternative to it.
Improvement & Assurance Panel: conditional trust under pressure
Statutory Improvement & Assurance Panels sit between the other two models. They represent conditional trust: Ministers believe the council can recover itself, but only under sustained, visible challenge.
Leaders operating under an I&A Panel should expect:
Regular, structured public reporting to Ministers on progress and risks
Persistent challenge around pace, not just direction of travel
Increasing focus on leadership behaviour, culture and follow‑through
The constant presence of an escalation threshold, even where progress is acknowledged
The Croydon experience illustrates this clearly. Successive panel reports have recognised improvement while reiterating that financial fragility remains and that gains must be sustained. Crucially, Ministers have repeatedly confirmed that further directions or commissioner involvement remain on the table if confidence falters.
For councils under this model, the risk is not failure to plan, it is failure to deliver with consistency over time. Panels are designed to observe patterns, not isolated achievements.
What this means for leaders
Taken together, the three models represent different judgements about capability, credibility and control:
Commissioners remove discretion to force pace where confidence has been lost
EFS/EAR preserve discretion but demand disciplined self‑correction
I&A Panels test whether autonomy can be preserved through sustained delivery
For leaders, the message is clear. As intervention deepens, the space for negotiation narrows and the consequences of delay increase. Conversely, where leaders demonstrate realism, grip and follow‑through early, the likelihood of remaining in the less intrusive models increases significantly.
In this sense, the side‑by‑side is not simply about mechanisms, it is about how trust is earned, tested and either restored or withdrawn in modern local government finance.
Putting this into action: a 90‑day plan for a council at risk
When financial risk becomes acute, time behaves differently. The usual rhythms of quarterly reporting, annual strategy refreshes and incremental transformation no longer apply. The first 90 days are decisive: not because they fix everything, but because they determine whether the organisation regains control or slides into deeper intervention. What follows is a realistic, leadership‑led framework drawn from commissioner reports, External Assurance Reviews and statutory panel experience.
1. Grip and governance (Days 1–30): restoring control and credibility
The first month is about establishing grip, internally and externally. This is the stage at which Ministers, auditors and potential partners form a view about whether the council understands the seriousness of its position.
Key actions include:
Establish crisis governance A small number of tightly focused boards should be created immediately:
A weekly finance board to oversee in‑year position, cashflow and short‑term risks
A savings and transformation board to track deliverability, not just ambition
An assets and capital board to control spend, disposals and pipeline decisions
These forums must be aligned explicitly with audit and scrutiny, with clear reporting lines and disciplined agendas. Their purpose is not discussion, but decision‑making and follow‑through.
Implement immediate spend controls Non‑essential spend should be paused while a clear view of commitments is established. Capex should be frozen and re‑prioritised, with only statutory, contractual or safety‑critical activity proceeding. This mirrors the discipline introduced through a Section 114 process, but done early and voluntarily, it signals intent rather than failure.
Commission a rapid financial and asset baseline Within the first 30 days, leadership must have a shared, unvarnished view of reality, including:
A refreshed Medium‑Term Financial Plan grounded in deliverable assumptions
Reserves position and constraints (including earmarked vs usable)
In‑year pressures and contingent liabilities
An initial asset triage distinguishing operationally essential, surplus and investment assets
This baseline is not about precision, it is about certainty of direction and surfacing issues that have previously been deferred or obscured.
2. Stabilise (Days 30–60): converting understanding into action
Once grip is established, the next phase is about stabilising the position so that confidence can begin to build. At this point, external reviewers and the department will be looking for evidence of difficult choices being made, not just plans being written.
Priority actions include:
Finalise an asset strategy that preserves value Asset disposals are often unavoidable, but panic sales destroy both value and future income streams. By days 30–60, councils should have:
A clear disposal strategy phased over time
Value‑preserving mechanisms (e.g. timing, use of overage, alternative structuring)
A parallel plan to rationalise the operational estate, aligning buildings to a leaner operating model
This is also the stage to confront the question many councils avoid: can we still afford our operational portfolio in its current form?
Lock down a realistic savings catalogue Savings plans must move from indicative targets to owned, costed and schedulable actions. Each saving should have:
A named accountable owner
A clear delivery pathway
A risk rating and mitigation plan
A central Programme Management Office should track delivery weekly. This level of discipline is a recurring theme in CIPFA External Assurance Reviews and commissioner feedback, because savings failure is one of the fastest routes to escalation.
Stabilise finance and systems Where finance systems are unstable or heavily reliant on manual workarounds, recovery will stall. A short, sharp ERP and finance stabilisation plan is essential:
Arrest manual journals and spreadsheet dependence
Reassert core controls and reconciliations
Provide leadership with reliable, timely management information
The Birmingham experience shows that without this foundation, even well‑intentioned recovery plans can unravel.
3. Transform (Days 60–90): laying foundations for the next two years
The final phase of the 90‑day plan is not about solving the structural problem, it is about setting a credible direction of travel that others can believe in.
Key priorities include:
Launch targeted demand‑management programmes For most councils, the biggest risks sit in adults’ social care, children’s services and homelessness/temporary accommodation. By days 60–90, leaders should move beyond diagnosis and begin:
Joint programmes with NHS and partners
Clear demand‑reduction or cost‑containment trajectories
Outcome‑based metrics rather than activity measures
Crucially, these programmes must be framed as multi‑year system change, not short‑term savings exercises.
Set out a two‑year operating model roadmap Councils recovering from financial distress cannot do everything at once. The roadmap should prioritise:
A stronger corporate core (finance, HR, commercial, commissioning, PMO)
Recruitment or stabilisation of key statutory and senior leadership roles
Explicit investment in financial capability, including member training and audit committee independence
This roadmap provides the bridge between immediate stabilisation and sustainable reform, and is often the point at which confidence from Ministers or panels begins to increase.
What good looks like after 90 days
No council is “fixed” in 90 days. But those that avoid escalation tend to share visible characteristics by this point:
Decisions are being made faster and more transparently
Financial information is trusted and acted upon
Leadership tells a consistent story internally and externally
Hard choices are acknowledged, not deferred
Most importantly, there is a sense that the organisation is leading its own recovery, rather than waiting for one to be imposed.
In the current local government environment, the difference between intervention and escalation is rarely about intent. It is about pace. The 90‑day window is where that pace is set.
Conclusion: from crisis mechanics to leadership choices
Section 114, Exceptional Financial Support and statutory intervention are often discussed as destinations, labels that councils either “reach” or narrowly avoid. This article has argued something different. These mechanisms are not endpoints, and they are rarely surprises. They are signals, of accumulated pressure, unresolved risk and, ultimately, leadership capacity being tested by a system that has very little slack left.
What emerges most clearly from the recent wave of Section 114 notices and interventions is that financial failure in local government is no longer an anomaly. It is the foreseeable consequence of structural under‑funding, relentless demand growth and limited local fiscal flexibility, interacting with local decisions, governance maturity and organisational capability. In such an environment, the margin for error is thin, and the cost of delay is high.
The distinctions between commissioners, EFS with External Assurance Reviews and statutory Improvement & Assurance Panels matter precisely because they reflect confidence judgements, not just financial arithmetic. They signal how the system views a council’s ability to diagnose its own problems, act at pace and sustain improvement under pressure. That judgement can strengthen, or unravel, surprisingly quickly.
Yet running through every case explored here is a less technical, more human truth: intervention does not remove leadership responsibility.
If anything, it intensifies it. Councillors still have to make trade‑offs that affect communities. Leaders still have to choose between popularity and sustainability. Senior officers still have to surface uncomfortable truths and stand by them. External oversight changes the context, but it does not do the job for you.
The councils that stabilise most effectively are not those with the smallest gaps, the fewest assets or the lightest scrutiny. They are those that confront reality earliest, create grip quickly, and move decisively from understanding to action. They recognise that asset sales are strategic decisions, not balance‑sheet exercises; that technology failure is a governance issue, not an IT one; and that demand pressures cannot be managed by budgets alone, but require system‑level change with partners.
The uncomfortable conclusion is this: there is no technical fix for what is, at heart, a leadership challenge. Capitalisation provides breathing space, panels provide challenge, and commissioners provide control, but none of these substitute for clarity, pace and accountability. Where leadership uses the moment to reset how decisions are made, how risk is owned and how the organisation tells itself the truth, intervention can become a turning point rather than a stigma. As more councils watch this landscape with unease, the question is not simply “will we issue a Section 114?”. The more useful question is “if pressure continues to rise, what will the system see when it looks at us?”, grip or drift, realism or optimism, action or deferral.
Because in the end, Section 114 does not define a council. How leaders respond to the conditions that make it possible does.
