Nineteen English councils handed multimillion-pound bailout agreements

The UK government granted £2.5 billion in emergency aid to 19 English councils to prevent their financial collapse, potentially leading to public asset sales.

This controversial accounting method, named "capitalisation directions," allows councils to convert capital from asset sales or loans into revenue.

The Department for Levelling Up, Housing and Communities approved this exceptional measure as a temporary fix before the general election, rather than addressing the overall £4 billion shortfall faced by councils. It follows a £600 million cash boost in January.

Critics argue that such methods are risky and poor accounting, akin to selling a house to pay off a credit card debt. Councils like Birmingham, Nottingham and others already under financial scrutiny may resort to significant asset sales.

The support, while a short-term relief for struggling councils, is not seen as a sustainable solution. Officials emphasize that councils must ultimately manage their own finances, noting a 7.5% increase in funding to £64.7 billion for the upcoming year.

However, much of the aid targets councils with severe issues requiring government intervention.