✱ By "bailout", they mean permission to sell assets to cover short-term operational expenses
- "A very temporary solution that stands normal accountancy practice on its head to get us to the other side of a general election"
this post was submitted on 29 Feb 2024
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This is the best summary I could come up with:
A record 19 councils in England have been handed multimillion-pound government bailout agreements totalling £2.5bn to prevent them collapsing into bankruptcy in the next few months, in a move likely to trigger a new round of public asset sales.
The Department for Levelling Up, Housing and Communities has agreed that the councils can take the highly unusual step of using funds raised by loans, or the sale of assets such as land and buildings, to plug holes in day-to-day revenue accounts.
The move, which follows an emergency £600m cash injection for all councils in January, is seen as a way of ministers minimising the prospect of further town hall insolvencies before the general election, rather than a solution to the wider crisis.
The agreements, known as capitalisation directions, are not grants or bailouts in the conventional sense of a cash injection but an arrangement that allows councils to bypass normal accounting rules to convert capital sums obtained by loans or selling assets into revenue.
Councils given exceptional financial support include Birmingham, Nottingham, Thurrock, Croydon, Slough, and Woking, all of which are in special measures after issuing formal section 114 declarations of bankruptcy in recent years.
Sir Stephen Houghton, chair of the Special Interest Group of Municipal Authorities, said: “This exceptional financial support will be welcome as a stopgap for those councils that have applied, but will not provide a long-term solution.”
The original article contains 576 words, the summary contains 231 words. Saved 60%. I'm a bot and I'm open source!