Four councils may borrow £97m to close budget gaps

The government has agreed to relax budgeting rules for four councils across the South East to allow them to balance their books.

The authorities will be allowed to use Treasury loans or cash from selling assets to cover day-to-day spending, which they are normally not allowed to do.

Woking Borough Council (WBC) may borrow £74.6m, Medway Council may borrow £18.4m and the borough councils for Worthing and Eastbourne may each borrow £2m.

Local government minister Jim McMahon said: "We are under no illusion of the state of council finances and have been clear from the outset on our commitment to get councils back on their feet and rebuild the foundation of local government."

The scheme is part of a government initiative in which it approved £1.31bn in support loans for 30 councils nationwide for the 2025/26 financial year.

WBC leader Ann-Marie Barker said the funds would help to cover its £2.1bn debt repayments without affecting frontline services.

"We remain committed to working alongside commissions and government to find a lasting resolution to our complex and challenging financial situation," she said.

WBC said it acknowledged the confirmation of its exceptional financial support bid, while Medway Council declined to comment.

Eastbourne Borough Council, however, branded the support "an unsustainable short-term fix".

"This is not additional money. The money is borrowed by the council to pay for services and has to be paid back," a spokesperson said.

"Our longstanding position has always been that this is not right and the government should appropriately fund local councils. However, this is the only solution they have offered."

The Ministry of Housing, Communities and Local Government was contacted for comment.

The support grants are only approved in principle and will be discussed by all councils at upcoming meetings.

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