Council gets government finance to avoid bankruptcy

Stoke-on-Trent City Council said it would have to cut "pretty much everything" if the finance deal fell through

Stoke-on-Trent City Council has confirmed it is to receive a £42.2m financial support package from the government, which it says will save it from effective bankruptcy.

The money is being made available in the form of a loan in the wake of financial pressure it faces due to the rising cost of providing social care.

The “in-principle” decision means the authority will now be able to borrow the cash over a two-year period.

The authority previously said it would have to cut “pretty much everything” if it failed to secure the funding deal.

Leader Jane Ashworth said the money was needed in order to sustain essential services in the city.

She said: “This money will now support the immediate pressures relating to children in care placement costs and fund investment in early-help intervention and wider transformation.

“It will also be used for financial resilience purposes including funding for redundancies and the attributable interest costs associated with the funding.”

Councillor Jane Ashworth says the money will help relieve immediate financial pressures

The authority says it plans to pay the money back as soon as possible to keep interest payments to a minimum.

It is also in discussions with the government about ensuring overall funding is “fairer” in future.

Ms Ashworth said more than 3,500 vulnerable adults in Stoke-on-Trent required social care support, and that 1,148 children in the city were in the council’s care.

This figure amounts to one in every 52 children in the city, which is the highest number per head of population in the country Ms Ashworth said.

“These figures are continuing to rise and the only way we can combat this is by investing in these essential services with more early intervention support.”

In February the council’s cabinet approved its budget plans for the coming year.

The proposals include raising council tax by 4.99% and putting an additional £26.1m into social care services.

The budget proposals will be put before a meeting of the full council on 5 March.