Council seeking 20-year Government loan to remain financially sustainable

WARRINGTON Borough Council has issued a further statement on its financial improvement and recovery plan, as it seeks exceptional financial support (EFS) from a Government loan to be paid back over 20 years.

It follows on from the council submitting its first Improvement and Recovery Plan to its Ministerial Envoys, which highlights huge financial challenges both now and in the coming years.
With debts of approximately £1.4 billion and a budget deficit of £90 million, the council will have to make difficult decisions on which services to provide, which will lead to it becoming a smaller organisation.

Warrington Borough Council’s Cabinet member for finance, Cllr Denis Matthews, says: “EFS will be needed to ensure that as a council, we can be financially sustainable into the future.
“EFS would effectively support us to completely change how we operate. The shape of the Council needs to change significantly. Our focus needs to be on the services that will have the greatest impact on supporting people to live good, healthy lives.
“Financial difficulty is not unique across the local government sector, and clearly, here in Warrington, we are doing our best to manage national issues and demands on our services. However, we also need to acknowledge that we have specific local issues that are driving some of our financial challenges, linked to risks around our commercial programme and our unaudited accounts.
“To that end, while we have previously reported a £90 million budget gap, these two additional factors will add further, additional pressure to our medium-term finance plan.
“This is all part of the process of getting a clear understanding of our financial difficulty, and we’re committed to being entirely open with our residents about the scale of the challenge we face.
“Ultimately, we know we will need to make some significant changes as an organisation. There will be difficult decisions ahead, but also opportunities.
“Through this process, we want to develop better relationships with our residents and partners, and will look at how we can involve our communities and neighbourhoods in future service delivery.”

The Council has submitted its application to the government for exceptional financial support (EFS), following approval by Cabinet in December.
EFS is a short-term mechanism that allows councils facing severe financial pressures to borrow alternative funding to temporarily cover budget shortfalls. It is essentially a loan that councils pay back to the government over 20 years.
Part of the Council’s EFS application also includes the intention to explore options with the government to increase Council Tax above the current referendum limit of 5%.
The Council is facing significant budget issues. As part of a report to Cabinet in December 2025, a £90 million budget gap across the Council’s four-year finance plan, otherwise known as its Medium Term Financial Plan (MTFP), was reported. This £90 million figure is based on the cost of running current services and projected demand on these services.
However, the Council is also looking at implications from its commercial portfolio and the need to sign off six years of unaudited accounts. Both of these issues will have further impacts on the budget. A complete figure concerning the Council’s budget gap will be reported to Cabinet and Scrutiny Committee in February.

Warrington’s EFS application in context
Council applications for EFS have increased since 2021/22. The gov.uk website shows the number of councils that have been in receipt of EFS since 2020, as follows:

• 2020/21: seven councils
• 2021/22: four councils
• 2022/23: five councils
• 2023/24: eight councils
• 2024/25: 19 councils
• 2025/26: 30 councils

The LGA’s Autumn Budget 2025 submission showed the local government sector entered 2025/26 with almost 1 in 6 councils that provide social care services (17 per cent) being dependent on financial support to set a balanced budget.

What happens next?
The EFS process is currently ongoing. The Council is expected to have confirmation from the government regarding the EFS outcome by late February 2026.
The Council’s EFS package would also then be subject to Full Council approval as part of the annual budget council meeting on Monday, 2 March 2026.
*Warrington has one of the region’s lowest Council Tax rates. Warrington’s Band D rate at £1,867.80 is £51 lower than comparable councils, and is significantly below the highest rates, which exceed £2,000.