Cheshire East council facing bankruptcy

Cheshire East Council says it is facing potential bankruptcy due to the impact of the cancellation of the northern leg of HS2.

Cheshire East says the authority had spent £11m preparing for the high-speed rail link, and this would now have to be written off. Most of this money – £8.6m – had been funded by borrowing and would now have to be funded from the council’s stretched revenue budget.

The council, may even be forced to trigger a section 114 notice, in effect declaring bankruptcy.

The report submitted to a full meeting of the council said it was seeking a “fair and equitable deal to compensate for the losses to the council and the opportunity cost to the borough”.

The council, which had reported a forecast £18.7m shortfall in its budget earlier this year, has already introduced a number of fund-raising and cost saving measures, including charges for green bins, cuts to library opening hours and closing its headquarters in Sandbach.

The council’s Labour leader, Sam Corcoran, has met the rail minister, Huw Merriman, who “agreed that a dialogue between the council and government would continue”, the meeting was told.

Counc Janet Clowes, said “I accept that it’s my government, if you like to put it that way, but we have a really good case to bring forward and we have a right to expect more in terms of the response that we can get as how those monies are now going to be allocated. Because Crewe deserves it, as does the rest of Cheshire East that was set to benefit indirectly from being the gateway to the north.”

The mayor of Cheshire East, Counc Rod Fletcher, said he wanted to take the “unusual step” of speaking on the issue as he was a retired railway operating manager. “I was personally devastated,” he said of the cancellation.

A Department for Transport spokesperson said: “Cheshire East is set to receive significant additional support from a new £4.7 bn fund to transform local transport across the North and Midlands, as well as a £110m uplift of over 11 years for local road maintenance.

“This is on top of a funding boost of more than £2.2m for bus services in the area as well as the extension of the £2 bus fare cap to the end of 2024 – all part of our Network North plans using redirected HS2 funding to benefit more people in more places, more quickly.”

ilovemacc comment: Nothing to do with Cheshire East profligately pumping £ millions into Crewe then?