Cheshire East Council will be effectively bankrupt if the government doesn’t approve the use of exceptional financial support by the end of this financial year, the council’s head of finance said.
The council applied for £17.6m of EFS last February because of the projected overspend this financial year.
And in December it applied for up to £31.4m for 2025/26 and indicated a potential request of £23.7m for 2026/27.
Cheshire East is facing an £18.3m overspend at the end of this financial year, April 2025.
At the corporate policy committee on Thursday, Cllr Chris O’Leary (Sutton, Con) said: “In relation to the use of exceptional financial support for this year, obviously, the original application was not for the entirety of it in this year, and it’s only been agreed in principle.
“So do we have any indication from the Ministry of Housing, Communities and Local Government as to when they are going to give approval to use that EFS, and what happens if we don’t receive that approval before the end of this financial year?”
Adele Taylor (pictured), interim executive director of resources, said: “We don’t yet have a date as to when we will hear about approval of exceptional financial support.
“But I am told that we will have that before the end of the financial year, and I think the hope is that that will be before we’re setting budgets at full council, as obviously that has an impact for next year.
“If, for any reason, we did not get approval for exceptional financial support, it’s a strange one because, obviously at that point, we wouldn’t have enough income to cover our resources, so I would have to issue a 114 [effective bankruptcy] at which point we would go into discussion about potential of exceptional financial support and any other actions that we would take.”
She added: “Just to give reassurance that, clearly, all I’ve done since I’ve been here is make sure that we are acting as if we are in a 114 light, if I can put it that way.
“So, all of the work that we have been doing to manage our resources has been around actually putting in place the structures that would be there if we were in 114, the difference would be stepping some of that up even further.”
Council leader Nick Mannion (Macclesfield, Lab) said: “Obviously we’ve significantly reduced the projected overspend by around £10m [over the past few months] and there’s a lot of hard work gone into that.”
He said no council had yet have received confirmation from the government as to whether they were going to be able to use a section of financial support for 2025/26 ‘so that’s not just us, it’s all authorities’.
“I’m sure the government knows local authorities need to set their budget by the end of February, and the decision will be forthcoming,” said Cllr Mannion.
(Story by Belinda Ryan, local democracy reporter)
Recent Comments