Facing Budget Deficits or a Section 114 Risk? Discover How PM3 Can Help

How PM3 Helps UK Local Authorities Avoid Budget Crises and Deliver Digital Transformation

A Critical Pain Point: Financial Instability and Service Risk

In 2024, UK local authorities are under unprecedented financial pressure.

The National Audit Office warns that 43% of councils in England could face bankruptcy, with a combined £4.6 billion deficit set to worsen when the statutory SEND debt override ends in 2026.

High profile cases show the severity of the problem:

• Birmingham City Council issued a Section 114 notice in 2023, citing an £87 million shortfall projected to hit £164.8 million in 2024/25, driven by equal pay liabilities, IT failures, and rising social care costs.
• Medway Council faces a £28 million budget gap for 2024/25, climbing to £65 million by 2026/27, with £225 million in debt tied to regeneration schemes.

These crises stem from a decade of cuts. Between 2010 and 2020, local authority funding in England and Wales dropped by almost 60%, forcing councils to make impossible choices between cutting discretionary services like libraries and fulfilling legal duties such as Awaab’s Law housing repair requirements.

Why Project Portfolio Management Matters More Than Ever

Projects are one of the biggest levers councils have to control spending and deliver value. But many are struggling with:

• Lack of accurate real time data on project costs, timelines, and benefits
• Resource shortages, especially in digital and technical roles — digital skill vacancies stood at about 18% in 2023, and 59% of staff lack basic digital skills
• Fragmented leadership, slowing down digital transformation efforts
• Uncoordinated portfolios, leading to duplication, overruns, and poor prioritisation

When these issues go unchecked, they lead to overspending, delayed services, and failed programmes which erode public trust and financial stability.

How PM3 Solves This Pain Point

PM3 is a project portfolio management (PPM) solution designed to give local authorities control over their entire project landscape from digital initiatives to housing, infrastructure, and statutory service delivery.

1. Financial Visibility and Risk Control

PM3 offers real time financial dashboards across all projects:

• Monitor costs against budgets, spot overspends early, and model corrective actions
• Link funding directly to outcomes, preventing misaligned investments
• Highlight projects at risk before they become financial black holes

2. Outcome Focused Prioritisation

Not all projects deliver equal value. PM3 enables councils to:

• Score and rank initiatives based on cost benefit, statutory impact, and community value
• Focus resources on legally mandated and high impact services
• Defer or de risk lower priority schemes when budgets tighten

Example: A council balancing social housing repairs against new build projects can model different funding scenarios to ensure compliance with housing standards without overcommitting capital.

3. Resource and Capacity Management

With PM3, councils can make the most of scarce skills:

• Allocate scarce IT and digital expertise to the highest value projects
• Forecast staffing gaps to avoid expensive contractor reliance
• Coordinate resources across departments to eliminate duplication

By optimising resource use, authorities can maintain momentum without spiralling costs.

4. Governance, Transparency and Reporting

PM3 strengthens governance by:

• Tracking decisions, risks, and approvals in one system
• Producing ready-made reports for councillors, auditors, and government departments
• Maintaining audit trails to meet scrutiny and compliance expectations

Robust oversight helps avoid the mismanagement and contractual overruns seen in many recent council project failures.

Real World Scenario: Housing and Infrastructure Projects

Challenge:

An authority must decide between funding urgent housing repairs or progressing a new housing development. With funding cuts, both cannot proceed at full scale.

PM3 Solution:

• Score projects by statutory compliance risk such as Awaab inspections, community need, and financial sustainability
• Model scenarios such as what if grant funding is delayed or what if inflation increases costs by 10%
• Align timelines and procurement to optimise cash flow and resource allocation

Result: The authority delivers essential repairs on time, meets legal obligations, and phases new builds without breaching its budget.

Why PM3 is the Strategic Choice for Local Authorities

By addressing the root causes of budget crises such as poor visibility, weak prioritisation, resource shortages, and governance gaps, PM3 empowers local authorities to:

• Prevent financial collapse by identifying and correcting risk early
• Deliver statutory services efficiently even in the face of cuts
• Accelerate digital transformation with clear controlled portfolios
• Build public confidence through transparency and accountability

Take Control of Your Project Portfolio Before It Is Too Late

If your council is grappling with budget deficits, delayed service delivery, or stalled digital projects, PM3 can help you bring clarity, rigour, and control to your decision making.

Contact our sales team today to book a personalised demonstration and see how PM3 can help your authority protect public services, stabilise finances, and deliver outcomes efficiently even in the toughest financial climate.