£66 MILLION loan for cash-strapped Nottingham City Council
It's one of 19 councils struggling to balance their books
Effective loans totalling nearly £2.5 billion requested by 19 councils suffering acute financial distress have been approved in principle by the Government.
Birmingham City Council will be able to access the largest amount of £1.25 billion, followed by Woking Borough Council, which has secured £330.7 million. Both councils declared effective bankruptcy last year.
The next largest amounts have been approved for Bradford City Council and Southampton City Council of £220 million and £121.6 million respectively.
The money has been made available through “capitalisation directions”, which give councils permission to use capital funds, often generated by selling assets, to top up spending on services.
However, all councils in receipt of a direction have to pay off the capitalisation over the next 20 years, which is why they are often referred to as loans.
A total of eight councils will have access to £40 million or more.
These are Somerset Council (£77 million), Plymouth City Council (£72 million), Thurrock Council (£68.6 million) Nottingham City Council (£66.1 million), Havering Borough Council (£53.7 million), Croydon Borough Council (£47.4 million), Stoke-on-Trent Council (£42.2 million) and Cumberland Council (£41.2 million).
If further funding is not forthcoming in the Budget on March 6, communities will face the consequences of a worsening financial crisis across local government, the Local Government Association (LGA) said.
An LGA survey of council chief executives found 85% of local authorities continue to plan reductions in spending on key services as the sector faces a funding gap of £4 billion over the next two years.
The remaining councils which have had a capitalisation direction approved in principle are Slough Borough Council (£23 million), Cheshire East Council (17.6 million), Medway Council (£14.7 million), Middlesbrough (£13.4 million), West Northamptonshire (£6.6 million), Eastbourne (£6 million) and North Northamptonshire (£3.9 million).