People’s council tax bills could rise to help claw back money (Image: Getty)
Wirral Council is preparing to ask the government for an emergency £40m bailout as the local authority’s finance boss warned it is “highly likely” the council will go bust without support.
It will have to issue a notice declaring effective bankruptcy if it does not get the support, director of finance Matthew Bennett said.
A new report said the council “faces a critical financial position.”
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Wirral is expecting to have gone over budget by £21.5m by March 2025 and will need to find £36million for the next financial year.
The report said nearly all available funds to the council will be used by the end of the year in order to balance the year’s budget.
Director of Finance Matthew Bennett, who wrote the report, said: “This approach is neither prudent nor sustainable, potentially leaving the council vulnerable to unforeseen circumstances.”
Before a council declares effective bankruptcy, through a section 114 notice, it can apply to receive emergency support.
The borrowing will eventially heap pressure on council budgets when that nees to be repaid.
Wirral Council has previously had to sell off assets it owns to pay back previous government bailouts, the Liverpool Echo reported.
Nottingham, Birmingham and Woking councils all went bust in 2023. They followed and Thurrock and Croydon – for the third time – in 2022.