Ministers Handed 14 Councils 91 Million Pounds to Fix What Is Breaking Them. The Two Biggest Bailout Requests on the List Got Nothing.
Estimated reading time: 6 minutes
In short. The Ministry of Housing, Communities and Local Government confirmed on 15 September 2026 that 91 million pounds will go to 14 councils already receiving Exceptional Financial Support, split 41 million pounds in 2026/27 and 50 million pounds in 2027/28, to fund projects the department says will reform the specific high-cost services driving each council's need for emergency support [1]. Thirty five councils in England hold Exceptional Financial Support for 2026/27 [2]. Shropshire and Croydon, whose in-principle support requests for the year, 121.0 million pounds and 119.0 million pounds respectively, are the two largest of any council on that list, are not among the 14 [2]. This site has already reported on one of the 14, Havering, and its own 54.2 million pound Exceptional Financial Support forecast [3].
Ninety one million pounds sounds like a lot of money until it is set against the 35 councils it was drawn from. Exceptional Financial Support is not a grant: it is government permission for a council in serious difficulty to borrow, or use the proceeds of asset sales, to meet ordinary running costs it cannot otherwise afford, a step that would normally breach the legal duty to balance a revenue budget [1]. Thirty five councils in England are relying on it this year, for sums ranging from under a million pounds to over a hundred and twenty million [2]. On 15 September, the department announced that 14 of those 35 would additionally share 91 million pounds, not to close the gap itself, but to pay for specific projects each council designed to bring its own costs down over time [1]. Minister for Local Government, Devolution and Regional Growth Jim McMahon framed it as a departure from firefighting: "Councils have been under enormous strain from a broken funding system and spiralling demand for services like care and temporary accommodation," he said. "This targeted support for councils facing the toughest pressures is the next step forward, helping end reliance on emergency funding and providing a blueprint for reform across local government" [1].
Fourteen councils, and what each is buying with it
The department's own figures set out how the 91 million pounds is divided: Bradford 12.7 million pounds, Redbridge and Trafford 7.5 million pounds each, Stoke-on-Trent 9.14 million pounds, Havering 6.75 million pounds, Lambeth 6.6 million pounds, Brighton and Hove 6.4 million pounds, Waltham Forest 6.14 million pounds, Sefton 6.2 million pounds, Isle of Wight 6 million pounds, West Berkshire 5 million pounds, Redcar and Cleveland 4.8 million pounds, Haringey 4.79 million pounds, and the Isles of Scilly 1 million pounds [1]. The department names specific projects for seven of the fourteen. Redbridge will fund home-based, AI-powered devices intended to detect and prevent falls so older residents can live independently for longer. Stoke-on-Trent is redesigning frontline social work around a model focused on keeping families together rather than taking children into care. West Berkshire is building a single point of access into children's services, covering special educational needs support, Early Help and children's social care, so a family does not have to find and repeat its case to separate teams. Brighton and Hove is piloting closer integration between its reablement service, which helps people recover independence after a hospital stay, and the NHS, aiming to get people home sooner. Trafford is consolidating its council information systems, including AI tools, so departments can coordinate more easily on a resident's case. Haringey is buying homes outright to reduce its reliance on temporary accommodation providers. Bradford is putting money into special educational needs transport, including educational psychology support and dispute resolution, to meet its legal duties to families [1]. The department did not publish comparable project detail for the other seven recipients: Havering, Lambeth, Waltham Forest, Sefton, Isle of Wight, Redcar and Cleveland, or the Isles of Scilly.
The 21 councils on the same list that got nothing
Exceptional Financial Support for 2026/27 was agreed in principle for 35 councils in total, before this fund existed [2]. Twenty one of them, needing support just as much by the government's own reckoning, are not on the transformation fund list at all: Barnet, Bedford, Cheshire East, Croydon, Cumberland, East Sussex, Gloucester, Halton, Hillingdon, Medway, Peterborough, Shropshire, Slough, Somerset, Swindon, Thurrock, Warrington, Windsor and Maidenhead, Wirral, Woking and Worcestershire [2]. The gap is not explained by scale. Shropshire's in-principle support for 2026/27 stands at 121.0 million pounds, on top of 71.4 million pounds the year before; Croydon's is 119.0 million pounds, on top of a revised 110.3 million pounds for 2025/26. Both are larger than any of the 14 councils receiving transformation money, including Haringey at 84.0 million pounds and Havering at 77.0 million pounds, the two largest requests among the recipients [2]. Warrington's request, 92.047 million pounds this year after 87.029 million pounds the year before, and Barnet's, at 79.6 million pounds, also exceed Havering's. This site has separately reported on Basildon Borough Council, which received a Best Value Notice in July partly over its financial position but does not itself hold Exceptional Financial Support this year [4].
The department's announcement does not say why these particular 14 were chosen over the other 21, beyond describing the initiatives as "designed by individual councils to meet their needs" [1]. It states that "lessons learned from these authorities will help the government understand what works and what doesn't, and ensure future funding is targeted more effectively" in future rounds, which reads as a pilot rather than a settled allocation formula, though the announcement does not use the word pilot itself [1].
The numbers are still provisional
Every figure in the department's published Exceptional Financial Support table, for all 35 councils and not only the 14 named here, is marked "support agreed in-principle" [2]. The guidance page itself notes that councils were given in-principle capitalisation support in February 2026, ahead of setting their budgets, and that the page "will be updated with final amounts of capitalisation agreed and capitalisation directions issued once confirmed" [2]. As of the department's most recent update to that page, 18 August 2026, no council's 2026/27 figure had yet been marked final [2]. The 91 million pound fund was announced four weeks after that update, against numbers the department's own document still describes as provisional.
Two more things happen before this settles into a pattern rather than a one-off. The department says the initiatives are meant to be judged on results, which means a second round, or a decision not to run one, is the test of whether "blueprint for reform" was more than a phrase in a press release [1]. And the councils left off this list, several carrying larger support requests than some that made it, still have to find their own answer to the same problem the fund is meant to solve.
Sources
- Ministry of Housing, Communities and Local Government, "Councils' high-cost services to be transformed through £91m fund", 15 September 2026. https://www.gov.uk/government/news/councils-high-cost-services-to-be-transformed-through-91m-fund
- Ministry of Housing, Communities and Local Government, "Exceptional Financial Support for local authorities for 2026-27", updated 18 August 2026. https://www.gov.uk/guidance/exceptional-financial-support-for-local-authorities-for-2026-27
- Civic Scrutiny, "Havering Needs 54 Million Pounds It Does Not Have to Balance This Year's Books. Most of the Gap Is Children Who Need Extra Help at School.", 21 September 2026. https://www.civic-scrutiny.co.uk/2026-updates/havering-council-54-million-exceptional-financial-support.html
- Civic Scrutiny, "Basildon Was Told to Help Build a New Essex Council. Less Than Two Months Later, the Government Cancelled It.", 22 September 2026. https://www.civic-scrutiny.co.uk/2026-updates/basildon-best-value-notice-essex-merger-withdrawn.html