Council seeking Government help

£15M BAIL OUT NEEDED TO BALANCE THE BOOKS

- By STUART ARNOLD Local democracy reporter [e-mail]

Cllr Glyn Nightingale

REDCAR and Cleveland Council is to approach the Government for a £15m effective bailout so that it can balance the books in the next financial year.

The council is also set to consult on another overall council tax rise again to the maximum 4.99% the limit allowed without a local referendum being organised for taxpayers, which includes a 2% rise in a precept allowable to raise funds for adult social care.

A cabinet report explaining the current financial picture said the council had experienced “sustained and significant budgetary pressures” in recent years. It said this was driven primarily by escalating costs in children’s social care, while delays in reforming the national funding formula for local government meant the council had been significantly under funded.

It said savings of more than £20m had been delivered over the past four years through extensive efficiency programmes, but despite this the “significant resourcing shortfall” experienced had also led to a substantial reduction in the council's cash reserves, which were now “critically low.”

With limited scope for further savings, the council was now exploring Government support allowing “additional financial flexibilities”. Schemes in previous years have enabled councils to capitalise revenue pressures for the coming year and fund them through borrowing in Redcar and Cleveland’s case an anticipated £15m repayable over an extended period.

The report explained: “This mechanism is intended to support councils facing acute financial challenges, bridging short-term budget gaps where other options are exhausted or not viable, and a credible route to sustainability exists.