Southampton residents could see council tax bills rise by 10 per cent if the city council fails to get its finances under control, the new finance chief has said.

The council needs to make up tens-of-millions of pounds by October in order to avoid potential Government intervention which could lead to an effective bankruptcy situation.

At a meeting of the full council on Wednesday, stark warnings were made by the new cabinet member for finance, Councillor Simon Letts.

He told members: "(The) consequences are pretty clear. 

"We’ve seen I think eight or nine councils have to call in Government help in one form or another and that Government help can take a number of forms.

"First form it will take is that commissioners will drive in.

"They will start a budget based on the priorities of the Government and not on the priorities of local people – and I don’t think anyone in this chamber wants that.

"Second thing that is likely to happen is that we might be subject to local Government reorganisation."

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The cabinet member cited other authorities that were completely shut down by the Government and replaced.

He continued: "The third thing that could happen is a council tax of 10 per cent could be imposed which has happened this year in a number of authorities in the south of England.

"I think we want to avoid all of those."

The council is now working on money-saving methods such as cutting back on services.

The council needs to save £20m this year alone, and still make further savings. Not all the savings it planned to make last year were achieved.

If the council fails to balance the budget and plug the gap in their finances, a section 114 notice could be issued which will lead to an immediate freeze in expenditure and ultimately, central government coming in.

The Labour administration said it is not planning to issue a section 114 notice.