Government published details today of support granted to Local Authorities who have requested Exceptional Financial Support (EFS) for 2026-27. “Support in Principle” has been granted to Cheshire East Council up to the value of £35 million to aid the Council to meet current deficits and deliver a balanced budget.
This news follows the recent refusal by Government to allow Cheshire East Council to raise its Council Tax by 9.9% without needing to hold a referendum.
Whilst this type of borrowing will help address current budget pressures, it must be remembered that this comes on the back of over £30million Exceptional Financial Support that was borrowed last year for 2026-26 that was supposed to deliver financial sustainability. This means that Cheshire East Council now have an EFS debt of over £60m that must be repaid over the next twenty years together with the costs of servicing that debt (which is currently running at around 5% per annum).
On Wednesday 25th February, at the Annual Budget Council, Cheshire East Councillors will be asked to approve the Mid-term Financial Strategy (Budget MTFS) that will identify how and when the EFS monies will be drawn down, together with the fiscal details that must deliver a balanced budget.
The MTFS requires the statutory publication of the Chief Financial Officer (S151 Officer)’s Section 25 Report on the robustness of the 2026/27 budget estimates and the adequacy of reserves.
This year, the unusual step was taken to publish the Section 25 Report as a separate Appendix.
The Section 25 Report Judgement is very clear;
Robustness of Estimates: These are robust but will only be delivered if a significant raft of conditions and actions are delivered at pace.
Adequacy of Reserves: The total level of reserves are inadequate for the size, scale and complexity of this Council.
Irrespective of EFS borrowing, the Council Budget and longer term finances remain worryingly fragile
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