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 authority’s head of finance has warned.
The council applied for £17.6m of exceptional financial support last February because of a projected overspend in the current financial year (2024/25).
In December it applied for up to £31.4m for 2025/26 and indicated a potential request of £23.7m for 2026/27.
The council is facing an £18.3m overspend at the end of this financial year, in April.
At Thursday’s meeting of the corporate policy committee, Adele Taylor, interim executive director of resources, said the authority did not yet know when they would receive a decision about the exceptional financial support requested.
“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,” she said.
“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.”
Ms Taylor 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 said the authority had reduced the projected overspend by around £10m over the past few months.
He said no council had yet have received confirmation from the government as to whether they were going to be able to use exceptional financial support for 2025/26.
“I’m sure the government knows local authorities need to set their budget by the end of February, and the decision will be forthcoming,” he said.
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