HS2 axe had 'significant shock' on council finances

Crewe Station was due to become a HS2 hub

The leader of Cheshire East Council has warned its next budget will be “difficult”.

Labour Cllr Sam Corcoran said the cancellation of HS2 was a “significant shock” to the council's finances and it did not have the reserves “to suffer the challenges”.

It follows a report which said if the council was required to write-off costs relating to HS2, it could trigger a S114 notice which is where a council is effectively bankrupt.

The Conservative MP for Crewe and Nantwich said the council could not blame all their financial issues on HS2.

Council leader Sam Corcoran said HS2 being cancelled was a "signficant shock"

Cheshire East Council has said it spent £11m on preparing for HS2 to come to Crewe.

“A lot of the costs that we’ve incurred are on consultancy fees around projects that would’ve been needed for HS2 or that would’ve been possible if HS2 had happened,” said Cllr Corcoran.

A report looking at the impact of HS2’s cancellation on Cheshire East said if the council was required to write-off costs linked to HS2, it could trigger an S114 notice.

“We don’t want to go into S114,” said Cllr Corcoran.

“But there are a number of challenges coming.

“We don’t have the reserves to suffer the challenges that are going at the moment so if you get a sudden shock, it hits you quite hard and HS2 being cancelled was a significant shock.”

Crewe and Nantwich MP Dr Kieran Mullan was a supporter of HS2

Dr Kieran Mullan, the Conservative MP for Crewe and Nantwich, was a supporter of HS2 and said he was “disappointed” about the decision.

“I’m very clear to government that there needs to be something done to help reconstitute the finances and actually deliver investment in a different way, when it’s clear that we’re not going to get the exact same investment we would have had with HS2,” he said.

Does he support the council’s call for compensation?

“I think what we have to be careful of is separating out a specific ask - and a very reasonable ask - from the council that I support around investment that we need to replace investment we were getting from HS2.

"But what we can’t have is Labour-led Cheshire East Council trying to make out that all their financial problems come out on the back of this,” he said.

Cheshire East Council is starting the process of setting its budget for the next financial year.

Earlier this month, the government announced how much councils will have to spend next year but groups representing local authorities have warned they may not have enough to balance their budget.

Cheshire East Council’s budget for this year included cuts to library opening hours, charges for garden waste collection and looking at its buildings which has led to the decision to close its headquarters in Sandbach.

Cllr Corcoran said next year’s budget is “also going to be difficult”.

“Unfortunately, it will include some things I do not want to do,” he said.

“I would like to be spending more on early intervention and prevention work, encouraging people to go out and enjoy the countryside, spending money on the parks, the leisure centres.

“But you have to provide certain statutory services and those are the ones where we have to spend money first to protect the most vulnerable.”

Cheshire East is set to start consulting with residents on its budget in January.