A politics expert has expressed a concern that public assets could be sold off to help repay Stoke-on-Trent City Council’s £42 million support loan from the government.
Dr Phil Catney, Senior Lecturer in Politics at Keele University, has said the true implications of the council getting the loan are difficult to know without the pay back terms being revealed, but “asset selling isn’t a long-term strategy for financial solvency”.
Daily Focus reported on Thursday afternoon that the council has received an ‘in principle’ decision that it can borrow up to £42.2 million over the next two years to cope with the rising demands of social care.
The local authority is preparing to make £8 million cuts to its annual budget as it looks to combat a predicted £29.5 million shortfall in the next financial year.
It is one of 19 councils in England to have been handed bailout agreements totalling £2.5 billion to prevent them from collapsing into bankruptcy.
Without the loan, Stoke-on-Trent City Council would have to strip back services, and if that was unsuccessful, it would then have been forced to issue a Section 114 notice – effectively declaring itself bankrupt.
Dr Catney told Daily Focus: “We don’t know what the implications of this loan will be. The terms of the payback are not there to see, and we don’t know what has happened with other local authorities.
“The council will already be looking at how it can pay the loan back. It worries me if that comes with asset-selling as that cannot be the basis of future stability. You run out of road quite quickly on that route.
“This is a large agreement that has been made but no repayment schedule has been confirmed yet. The council and voters should know about the terms.”
The Government funding will allow the council to change the way children’s services operate to help more children and families to thrive.
There are 1,148 children in the council’s care – one in every 52 children in the city – which is the highest number per head of population in the county.
The city also has more than 3,500 vulnerable adults requiring social care support.
Dr Catney added: “It is really important that the money is spent well. It needs to be used efficiently. If it works and children can stay in their homes or manage better, then that is in everyone’s interests. There is a valid plan around early intervention.
“But I am also interested in how adult services will fair in the long run as we have an ageing and sick population in the city.
“What we need for the future is a central government grant scheme that puts weight in favour of those dealing with high levels of deprivation, such as us.
“Our council hasn’t been reckless like some others in the country, but we do have a lot of people who need support.”
Nobody is blaming S-O-T council for the lack of available funds however the council need to make a decision about if this is the right way to deal with years of austerity cuts by the current government, its a debt that will weigh heavy on the city and its residents for many years to come and not one that is of its own making.