Cheshire East Council has been named as among 19 councils that will require additional flexibility to balance next year’s budgets.
The council will be able to use its long-term investment budgets to pay for day-to-day services, something that councils are not normally allowed to do.
This can include money raised through the sale of council-owned assets such as land, or buildings including community centres, swimming pools, and civic halls.
In a statement the council said that it,like councils across the country, has been experiencing unprecedented financial pressures.
“This results, in part, from increased demand and costs for special educational needs which have not been met by increased high-needs funding.” adding
There is also continued financial uncertainty following the government’s announcement, in October, of the cancellation of HS2 north of Birmingham and spending already incurred by the council in preparation for HS2 phase 2.
Earlier this week, the council approved a balanced budget for 2024/25.
The plans included spending money from reserves to cover the impacts of additional financial pressures. However, this means that the council’s general fund reserve is now insufficient to adequately protect the council against future risks.
Jonathan Carr-West, Chief Executive, LGIU, said:
“It’s good to see the Government finally recognising the scale and severity of the financial crisis in local government that so many of us have been warning of for years. This comes only a day after our research revealed that half the councils in England are seriously concerned about their financial viability in the next five years if nothing changes.
We know how desperate these councils were to receive this exceptional support. For them, it is a last-minute reprieve that wards off immediate financial collapse. On that basis it is welcome news. But we should not mistake this for generosity on the part of the Government. They are simply allowing councils to borrow and to sell their own assets. We should not mistake today’s announcement for a sustainable long-term
