Trafford Council is asking the government for a £20.6 million loan to help balance its books, after a national funding review left the borough among the worst-affected councils in England.
Draft budget proposals published this week reveal the scale of the financial challenge facing the local authority - though leaders insist the council is "not about to go bankrupt" and services will continue to be delivered.
Council finance officers had successfully reduced an initial three-year budget gap of £50 million down to £10 million through efficiency savings. However, the government's Fair Funding Review - a major overhaul of how money is distributed between councils - has added a further £24 million to that gap.
The review assessed councils' "relative need" for funding and their ability to raise money locally. Trafford, despite having one of the lowest council tax rates in Greater Manchester, was penalised because it has a relatively healthy tax base and lower levels of deprivation compared to neighbouring boroughs.
The council's Director of Finance, Graeme Bentley, warned in the report that without the government support, he would be "compelled to consider a Section 114 Notice" - the formal process by which a council declares it cannot balance its budget.
It is the second consecutive year that Trafford has sought emergency support from the government. Last year, the council was one of only six authorities in England granted permission to raise council tax by 7.49% - well above the normal 5% referendum limit - resulting in bills rising by over £120 for a typical Band D property.
Why has this happened?
The budget report describes the outcome of the Fair Funding Review as "deeply disappointing".
Trafford's increase in Core Spending Power - the government's measure of council resources - will be just 3.8% over the next three years, compared to a national average of 15% and the lowest of any Greater Manchester authority.
By contrast, Manchester will see a 32% increase, Bolton nearly 20% and Stockport will receive 7.5% more.
The report points to several factors behind Trafford's financial difficulties: years of council tax freezes under previous administrations, rising demand for children's and adult social care, and increasing costs for temporary accommodation for homeless families.
A third of council spending now goes on adult services, with a quarter on children's services.
Another council tax rise proposed
The budget proposes a council tax increase of 4.99% for 2026/27, comprising a 2% adult social care precept and a 2.99% general increase. This would take the Band D rate to £1,807 per year - an increase of £85 on top of last year's £120 rise.
Even with two consecutive years of significant increases, Trafford will remain the third-lowest council tax in Greater Manchester. The GM average is £1,917.
What does this mean for local services?
Several savings proposals will directly affect residents:
- School meals and cleaning costs set to rise: The council plans to reduce subsidies on traded services to schools, saving £727,000 over two years. Schools may face increased charges that could be passed on to parents.
- New care charges: People who fund their own care will face new "arrangement fees" when the council organises services on their behalf. A review of pension-age charging thresholds is also planned.
- Nursing home rate negotiations: New rates will be established with care home providers, saving £1 million over two years.
- Home-to-school transport changes: A £1.2 million savings programme will "optimise routes and promote independence" for children with special educational needs.
- Temporary accommodation crisis: The council faces a £900,000 shortfall due to rising homelessness, with housing costs "significantly more expensive for Trafford compared to Greater Manchester."
- Arts centre review: Sale Waterside Arts Centre faces a review to "improve effective use of asset and business development."
Schools budget crisis
Beyond the main council budget, Trafford faces a separate financial crisis in schools funding. The deficit on the Dedicated Schools Grant - driven by soaring demand for special educational needs support - is projected to reach £60 million by 2028.
The number of children with Education Health Care Plans in Trafford has more than doubled since 2015, from 1,382 to 3,359.
Opposition response
Conservative group leader Cllr Nathan Evans was sharply critical of the Labour administration's handling of the council's finances.
"This draft budget confirms what residents already fear: Trafford is in a dire financial position under Labour, with the council now admitting it faces an exceptional budget gap and is relying on the Government agreeing to £20 million emergency support, just to balance the books - whilst putting up council tax by another 4.99%," he said.
"The report warns that without this support the council could be forced towards a Section 114 notice, the same path that has led to effective bankruptcy in other Labour-run areas and devastating cuts to frontline services.
"Instead of focusing relentlessly on fixing the fundamentals - protecting social care, safeguarding children, and supporting our most vulnerable - Trafford Labour has spent years chasing headlines: cycle lanes, political vanity projects and expanding the council's PR machine, while asking residents to pay more and accept less."
What the council says
Council leader Tom Ross said: "We have always been honest and open about the significant ongoing financial challenges we have faced for many years.
"Historic funding deficits, increasing cost pressures and a rising need for services especially among children's and adult social care, compounded by several years of council tax freezes have put an increasing strain on our finances.
"That is why we made the responsible decision to ask the government for financial assistance while at the same time lobbying for fairer funding for Trafford."
The draft budget will be discussed by the council's Executive on 14 January, with a final budget to be approved by full Council on 5 March.
The council is continuing to lobby the government for changes to the funding formula before the final settlement is announced in February.
Hannah Spencer, Leader of the Green Party group, said: "It's really worrying, but not a surprise to see another really difficult budget in Trafford.
“It is really disappointing that the Labour government's new funding model actually makes things worse for struggling councils like ours.
“We have to be clear that much of the responsibility lies with the Conservatives who ran the council for many years.
“The Conservative government slashed funding to councils by 60%. Nothing could protect our local services against that sort of attack. But other areas increased council tax by modest amounts, keeping the income moving up alongside inflation. But Trafford Conservatives let the council's coffers run dry in their time at the helm."
