Halton avoids bankruptcy with a £50m government loan to address immediate budget shortfalls and future deficits.
Halton will likely get about £20 million. This covers an immediate money shortage this year. They may also get £32 million more. That helps balance their budget in 2025/26. This help isn’t free money. It’s a loan from the government. Halton must repay it over 20 years. They will pay a fixed interest rate, too.
Halton spent over £19 million more than planned this year. They only have £11.6 million in reserves. All councils must legally balance their budgets. A “Section 114” notice is like bankruptcy. The council can’t truly go bankrupt. But they’d face huge financial limits. New spending would be impossible.
This help avoids that worst-case scenario. Some think it’s just a short-term fix. Debt burdens already struggling councils, they argue. A council speaker noted problems many councils face. Halton has big increases in demand. Costs are rising for social care services. This affects adults and kids.
The government knows Halton’s difficulties. This help allows for vital changes. They can change how they deliver services. They need to cut costs too. This program gives £1.4 billion in aid. About one in five English councils benefit. This includes Cheshire East and Wirral.
The government has set restrictions. Councils getting help cannot sell some assets. They cannot sell parks to repay loans. These are considered community assets. A minister said they know council finances are bad. The goal is to help them get back on track. They want councils to be confident seeking necessary help.
The government promises a partnership, not punishment. Together, they want better public services. They hope to create financial stability. Halton’s overspending comes from agency staff. Social workers and care workers cost more. Expensive children’s residences also play a role.
Several councils issued “Section 114” notices recently. Birmingham, Nottingham, and Woking did it. Such instances were once very rare.