Labour & Independent Councillors on the Finance Sub-Committee have approved the drawing down of £17.6m exceptional financial support (ESF) from Government, despite the long-term cost of interest rates.
The EFS, is not ‘free money’ but must be paid back over up to twenty years and incurs interest. Members were told that it is needed to balance the forecast overspend at the current financial year (2024/25) and to minimise the use of reserves. The borrowing costs on this sum are in the region of £3 million every year.
The Interim s151 Officer (Finance) stated that if Councillors did not agree, “ I would have to consider issuing a 114 [effectively a bankruptcy notice] because we would not have adequate resources to continue with our work.”
This raised concern with Councillors.
Cllr Stewart Gardiner (Knutsford, Con) explained; "We do have some reserves, perhaps we should be using those first in this year.”
Cllr Janet Clowes (Wybunbury, Con) highlighted that the council was managing to reduce some of its overspend but
“the fact is, we're still in the red, and we've still got increased demand”, “Reserves are there to do that.” “I know we don't have enough reserves to counter the whole £18.3m overspend for this year but again, it begs the question, we have these quarterly reports now, and consistently we haven't met our own targets.”,“We haven't met our own MTFS budget lines, and by the sound of it, we're not going to be able to do that by the year's end.”
Cllr Reg Kain (Lib Dem: Alsager) also expressed concerns about using the EFS.
“I have serious reserves about all of this, because I can't actually see the situation changing over a number of years, and all I can see is that we are going to impoverish future generations of Cheshire East residents with loans that won't actually solve the situation,” said the Alsager
Cllr Gardiner called for a recorded vote on the specific recommendation in relation to utilising the £17.6m EFS.
The recommendation was approved.
Councillor Lata Anderson (Wilmslow Ind), Dawn Clark (Crewe, Lab), Alan Coiley (Wistaston, Lab) , Brian Drake (Alsager, Lab) voted in favour of the recommendation. Councillors David Brown (Congleton, Con), Janet Clowes, Stewart Gardiner and Reg Kane abstained.
References:
https://moderngov.cheshireeast.gov.uk/ecminutes/ieListDocuments.aspx?CId=965&MId=10324&Ver=4
https://www.knutsfordguardian.co.uk/news/24846413.cheshire-east-draw-17-6m-financial-support-government/?ref=ebln&nid=1132&block=article_block_a&u=953a6404d1fe3aed6f0db935a1fecae8&date=100125
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