Auditors don't fear bankruptcy as South Tyneside Council finances appear in good order
Fallout from the pandemic has seen many local authorities warn they could be forced to effectively declare themselves bankrupt by issuing S114 notices.
But according to auditors for the borough, town hall finances appear to be in good order on initial inspection, although they expect to ask for extra details to double check this.
Mark Rutter of EY, a major accountancy firm, said: “You will have seen the media coverage around quite a few local authorities talking about S114 notices and the various financial impacts COVID-19 has had on all local authorities.
“I think it’s fair to say so far we’re not overly concerned.
“I think there’s council’s in a worse position than South Tyneside, but we will be asking for some enhanced disclosures in the accounts.”
Rutter was speaking at a meeting of the council’s Audit Committee, which was held by videolink and broadcast via YouTube.
Town hall finance chiefs have so far been handed almost £12million in government grants to cover increased costs and lost income caused by the COVID-19 outbreak.
This includes a third round of funding confirmed on July 16 worth about £1.5million.
But despite the handouts, many councils say the cash has still not been enough to cover expected budget shortfalls.
Rutter added more information on this is also likely to be requested on this and the impact it is predicted to have on the council’s ‘financial sustainability and health’.