Council's emergency financial support extended

The government has approved a request from a city council to extend financial support it was given to prevent its financial collapse.

Southampton City Council was given special flexibility in 2024/25 to use capital resources through borrowing to cover revenue costs.

Although the authority has been able to propose a balanced budget for 2025/26 using its own resources, its leaders asked to carry the flexibility over into the new financial year.

It was announced this week that across England, 30 local authorities have been given support to manage financial pressures in 2025/26.

The Ministry of Housing, Communities and Local Government said Southampton City Council had in-principle approval for a revised £89.9m of exceptional financial support.

It was confirmed these would not be in addition to resources available for 2024/25.

The council's cabinet member for finance, Simon Letts, said the extension did not mean the council would require "any further borrowing or money".

"It does mean that we can spend the resource that we have been allocated over two financial years [allowing us] to effectively roll out the transformation programme in an organised and rational way," he said.

The original exceptional financial support allowed for up to £52m to be borrowed to cover the claim.

Lorna Fielker, leader of Southampton City Council, said: "We have made major progress fixing our finances over the past year.

"We are now able to set a balanced budget for day-to-day spending without the need for government support."

At the time of publication, the council was not able to confirm the breakdown of the revised £89.9m for 2025/26 or what revisions had been made from the £121.6m allocation for 2024/25.

Latest projections suggest the council will only need to borrow around half of £39.3m initially allocated to balance the current year's budget.

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