Bradford Council get special financial help from Government to tackle debts

But for the first time councils have been instructed not to dispose of community and heritage assets to balance their books.

Bradford Council will be allowed to borrow £127 million through capitalisation, the third-highest figure after bankrupt local authorities Birmingham and Croydon.

It comes after the local authority was granted permission to increase council tax by 9.99 per cent from April 1, without the need for a referendum.

Bradford was first granted exceptional financial support by the Government in December 2023, when it was at risk of going bankrupt, and was allowed to borrow £140m.

Council leader Coun Susan Hinchcliffe said: “Like many other councils, after 14 years of reductions in funding from central Government we have been left in an unsustainable financial position. We welcome the additional funding from the new Government for next year.

“It shows they’ve listened and this is a significant step in the right direction but it can’t solve the challenges local government faces overnight.

“We are still however facing severe pressures on budgets for all our services, from social care to maintaining our parks and green spaces.

“We will have to continue to make difficult decisions to ensure a stable financial future.”

The Ministry of Housing, Communities and Local Government (MHCLG) confirmed that more councils had requested exceptional financial support this year than since the process was established in 2020.

The Government has now removed a 1 per cent premium previously applied to borrowing from the Public Works Loan Board, however interest is still payable on any loans.

Instead, the MHCLG said officials will “work with councils on improvement and actions they can take to help manage their position to ensure value for taxpayer money”.

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.

“We are working with local leaders, encouraging councils to come in confidence where needed to seek help and be assured we will offer a relationship of partnership – not punishment – in our joint mission to improve public services for communities and create economic stability as set out in our Plan for Change.”

The MHCLG said increases in the accessible money were only agreed on “an exceptional basis”.

Not all requests for support were granted and no request was agreed to in its entirety. Bradford was the only local authority in Yorkshire to have its request accepted.

Additional increases in permitted capitalisation were only permitted where councils had lower levels of existing council tax compared with similar councils, the department added.

Currently, Bradford has the lowest council tax in West Yorkshire.

A report from Unison last year found that Bradford is set to have a bigger budget deficit than bankrupt Birmingham over the next financial year. The shortfall represents 22 per cent of the council’s overall revenue, according to the union.