Consultation under Section 114: Engaging Communities amid Financial Crisis

When a council issues a Section 114 notice, it declares that it cannot balance its budget. Recent years have seen Woking, Thurrock, Slough, Croydon and Birmingham reach this crisis point. Yet even in this emergency state, councillors and officers remain legally bound to consult fairly and meaningfully on service cuts or budget changes. The stakes are significant. Token or rushed consultation risks legal challenge and loss of public trust. This article sets out how to conduct defensible consultation under severe financial pressure.

Legal requirements

Three frameworks govern Section 114 consultation. The Gunning Principles require consultation when proposals are still formative, with clear information, adequate time and conscientious consideration of responses. Officers must document how consultation influenced decisions. The Public Sector Equality Duty obliges councils to consider how cuts affect protected groups before deciding. The Bristol SEN case (2018) saw a decision quashed for consulting after the fact. The Treasury Green Book approach requires testing all feasible savings options and keeping the analysis transparent.

Learning from Woking, Croydon and Birmingham

Woking: staged consultation for different audiences

Woking issued its Section 114 notice in June 2023 after accumulating a £1.2 billion deficit, largely from failed property investments. The council moved quickly to develop a cuts plan covering playgrounds, community care, sports facilities and more. Crucially, it then opened a public consultation on those proposals rather than treating them as final. Woking began a separate staff consultation on potential redundancies several months earlier. This sequencing allowed the council to address workforce concerns before engaging the wider public, giving trade unions and employees real input into the process. By the time public consultation launched, staff understood the severity of the situation and many operational questions had been resolved. The lesson is clear: stagger consultations to focus on different audiences. Consult frontline staff and unions first, both because employment law requires it and because their insights can shape better public proposals. Keep each phase open long enough to meet Gunning timing requirements. Staff who feel heard are more likely to support difficult changes and help communicate them to residents.

Croydon: broad resident engagement under pressure

Croydon’s trajectory offers perhaps the starkest lesson in sustained crisis management. The borough issued its first Section 114 notice in November 2020, followed by a second in 2021 and a third in November 2022. Each notice reflected deepening problems: failed property ventures, a £1.6 billion debt burden and fundamental governance failures. Yet even in this multi-year crisis, Croydon’s new administration prioritised consultation. Immediately after the November 2022 notice, the council launched an online “Budget 2023/24: we want to hear from you” campaign in December. The materials were refreshingly honest, explaining that the council faced a £60 million gap and needed to make £35 million of savings beyond those already planned.

Croydon’s consultation materials emphasised protecting essential services. The council asked residents directly: which services mattered most? Responses showed clear priorities for social care, waste collection and children’s services. The council invited ideas for savings and alternative approaches, not just reactions to predetermined cuts. By the 8 January deadline, 1,467 people had responded. The council published a summary showing what residents had said and how it influenced the March budget. For example, when residents overwhelmingly prioritised children’s services, the council adjusted its cuts programme to shield those areas. When people suggested specific efficiency measures, officers investigated them. The Croydon experience demonstrates several principles. First, communicate early and honestly about the scale of the problem. Residents can handle difficult truths if presented clearly. Second, use accessible formats. Croydon’s online survey worked because it asked straightforward questions with multiple choice options alongside free text. Third, close the feedback loop. Publishing what you heard and what you did about it builds legitimacy even when final cuts remain severe.

Birmingham: transparency, oversight and intervention

Birmingham’s Section 114 notice in September 2023 shocked the sector. As the UK’s largest council serving over one million people, Birmingham had long been seen as too big to fail. The notice cited an £87 million in year shortfall and a colossal £760 million equal pay liability stemming from years of unresolved claims by predominantly female staff. Central government intervened rapidly, appointing commissioners to oversee the council. Yet even that intervention process included consultation. The Secretary of State allowed a five day representation period for stakeholders before finalising intervention plans. Though brief, this window underlined that consultation is expected even in crisis, even at national level. Birmingham’s own budget consultations for 2024/25 and beyond have required particular rigour. The council faces annual cuts of over £150 million, affecting everything from street lighting to libraries to social care. Officers have had to present multiple scenarios to residents: what happens if council tax rises by the maximum allowed? What if Birmingham sells assets? What services can be protected and which cannot?

The Birmingham case highlights what happens when consultation and transparency fail earlier in the process. Much criticism of the council centred on weak financial oversight, inadequate scrutiny and decisions taken without proper impact assessment. By contrast, the intervention period has forced a level of openness Birmingham had previously lacked: detailed financial reports, public commissioner updates and extensive consultation materials. The lesson from Birmingham is twofold. First, robust consultation helps counter claims of predetermined decisions or inadequate oversight. When every step is documented and every stakeholder has had their say, it becomes far harder to argue the council acted arbitrarily. Second, the cost of avoiding consultation is ultimately higher. Birmingham’s failure to engage meaningfully with equal pay claimants for years contributed directly to the £760 million liability. Early, honest dialogue might have contained the problem.

Common themes across all three

These cases reveal consistent patterns. All three councils found value in consultation despite extreme pressure. All three staged their engagement, whether consulting staff before residents or running multiple waves of public input. All three discovered that residents, when given clear information, can help prioritise difficult choices. The cases also show that consultation is not just about avoiding legal challenge. It generates useful intelligence. Woking’s staff consultation identified operational savings that officers had missed. Croydon’s residents highlighted priorities that differed from officer assumptions. Birmingham’s enforced transparency revealed financial problems that might otherwise have festered longer. Finally, all three demonstrate that even shortened consultation can be defensible if justified and documented. None ran the ideal twelve week process. But each could show why the truncated timeline was necessary, what steps were taken to maximise participation despite time pressure, and how feedback genuinely influenced decisions.

Designing a robust process

Build time and trust

Start talking to elected members, scrutiny committees and staff before a Section 114 notice is formally declared. Plan phased engagement: brief councillors and senior staff, hold preliminary stakeholder sessions, then roll out public consultation. Frame surveys or meetings as genuinely exploratory and present multiple plausible options as alternative scenarios, not as fait accompli. This meets Gunning’s formative test.

Provide clarity and evidence

Explain why the council cannot balance the books using plain figures or charts. Outline the realistic range of options, co-produced across finance, operations and community teams. Use case studies to make abstract figures concrete. If merging a community centre, show the savings and planned user support. Publish an Equality Impact Assessment alongside proposals to demonstrate consideration of protected groups.

Reach out inclusively

Do not rely solely on online portals. Consider phone surveys, translated materials, video Q&A sessions and community roadshows. Document which groups were reached and how. The tone should be empathetic, acknowledging anxieties and explaining available support.

Ensure timing and transparency

Aim for adequate consultation time. A six week period may be defensible if resources are collapsing rapidly, but justify and document the timeframe clearly. After closing, summarise all feedback quantitatively and report it to decision makers. Record how responses influenced decisions: “37% of respondents opposed service X cuts; we have maintained X for now but will revisit in 2025.” This completes Gunning’s conscientious consideration requirement.

Key takeaways

Consultation under Section 114 is essential, not optional. Identify risks early and start stakeholder dialogue before a formal notice. Generate realistic options using Green Book principles. Allocate sufficient time and justify any shortened timelines. Maintain a clear audit trail of how responses were reviewed. Tailor channels to include disabled, minority and low income groups. Frame consultation as respecting local voices. Meaningful engagement builds resilience. Well run consultation can spot hidden risks and demonstrates that decisions were not arbitrary. Under Section 114, officers need defensible, lawful processes more than ever. Effective consultation, thorough, timely and inclusive, is your best safeguard.

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