Ministers have shared “significant concerns” that cash-strapped Cheshire East Council could go effectively bankrupt.
The council has been handed a best value notice by the government as a “formal notification” of its concerns and to highlight the need for improvement.
Cheshire East Council has faced financial issues in recent years and has been given “exceptional” powers to borrow money to avoid going bust in the last two years.
The has contacted the authority for comment.
A best value notice is a formal warning issued by the government to local authorities where there are concerns about performance.
Local government minister Jim McMahon said it was not a statutory intervention but a “formal notification of the department’s concerns”.
In Cheshire East’s case, the government has raised concerns about the sustainability of council finances.
The notice acknowledges steps are being taking to address the issues but said that ministers “remained concerned”.
The government said the notice also comes after an external report found low reserves, historical overspending, and challenging savings targets could see the authority go effectively bankrupt.
It also sets out a number of actions for the council to take, including agreeing a “single overarching improvement plan” and continuing with its current transformation plan.
McMahon said there was no evidence of a “current best value failure” but that “significant issues need addressing at pace to avoid future failure”.
The notice will be in place for 12 months and reviewed.
Meanwhile at neighbouring Warrington Council, ministerial envoys are set to be sent in, after a best value investigation found the authority was failing to comply with its best value duty in five areas.
