Taxpayers face 20-year bailout loan repayments

LDRS Exterior view of Wallasey Town Hall with a union flag at full mastLDRS
This bailout would be repaid by taxpayers over 20 years

Taxpayers will spend the next 20 years paying off a council's £40m debt if the government approves a bailout request.

Wirral Council has asked for the money after finance bosses said the local authority was "effectively bankrupt".

The council has a huge budget shortfall this year and faces further cuts in the next financial year.

It is set to begin the process of seeking voluntary redundancies next week.

An emergency meeting over the critical state of the council's finances was called on Tuesday.

The bailout request was made the following day at a policy and resources committee meeting.

Councillors agreed to ask Whitehall for a bailout of up to £40m to prop up its budget over the next two years.

Redundancies

Finance director Matthew Bennett said the request was "absolutely necessary" since the council had no reasonable alternative other than bankruptcy.

Over the next five years, he said the council was forecast to go over budget by up to £80m.

If the bailout is approved by the government, £20m will be used to this year to mitigate the council's budget black hole, which has been attributed to soaring demand for social care.

The other half of the £40m loan would be used next year to support "service reform and operational efficiencies", as well as further increases in social care costs.

The bailout would be repaid over 20 years, meaning people in Wirral will be paying it off until 2045.

During the same meeting, it was revealed that the 2025-26 budget would likely include £25m worth of budget cuts, including redundancies, as part of a restructuring and downsizing of the council.

Wirral Council will retain a spending freeze and recruitment controls in place "to limit expenditure to only absolute essential items" for this year and 2025-26.

A broader review of council finances is under way by the Chartered Institute for Public Finance and Accountancy.

A separate analysis, by the Local Government Association, is expected to be published next month.

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