For the first time in UK history, a police force has been forced to ask the government for an emergency financial rescue to avoid bankruptcy. The Home Office has intervened to prevent South Yorkshire Police from collapsing after a staggering £65 million black hole was discovered in its finances.
The Unprecedented '114 Notice'
South Yorkshire Police has become the first force in the country to issue a formal 'Section 114 notice', a mechanism previously used only by cash-strapped local councils. This notice is an effective declaration that the organisation cannot balance its books and requires immediate central government support.
The crisis stems from a major accounting blunder that remained undetected for five years. The error relates to a £65 million loan taken out in 2019 under the watch of the then Police and Crime Commissioner (PCC), Dr Alan Billings. The loan was intended to fund essential equipment, including police kits, vehicles, and IT upgrades.
However, over the subsequent five years, £16 million in scheduled repayments were missed, and future payments totalling £49 million were completely omitted from the force's financial planning. This meant funds were incorrectly allocated to other services, creating a massive, hidden deficit.
Home Office Steps In with £17m Bailout
The financial disaster only came to light after Dr Billings left office and the PCC's powers were transferred to the South Yorkshire Mayoral Combined Authority (SYMCA) in May 2024. Following the issuance of the 114 notice, Policing Minister Sarah Jones confirmed this week that the Home Office would provide £17 million in exceptional financial support.
In a letter to the SYMCA, Ms Jones stated that "a series of historic accounting errors" had led to this unprecedented situation. She announced a 'capitalisation direction', a tool that allows exceptional one-off costs to be managed over a longer period. This intervention enables the force to set a balanced budget and continue operations.
A spokesman for the mayoral authority confirmed that, thanks to the Home Office's support, the force has not had to declare formal bankruptcy and has set a balanced budget for the 2025/26 financial year.
Independent Inquiry and National Context
The Mayor of South Yorkshire has commissioned an independent review by the Chartered Institute of Public Finance and Accountancy (CIPFA) to investigate the circumstances of the omissions. This review is in its final stages and will be published soon.
This local crisis unfolds against a backdrop of severe financial strain on police forces nationwide. The development comes just weeks after police chiefs warned that proposed justice reforms could cost forces an additional £800 million, potentially pushing some towards insolvency. They expressed concerns that plans to reduce the use of short prison sentences could lead to a surge in crime, further stretching already tight resources.
While the SYMCA states that South Yorkshire Police is now on a stable footing for the next two financial years, the authority acknowledges that the £65 million error "places material strain on the financial health" of the force, exacerbating the challenges felt by police services across the UK.
