The government has agreed to provide Stoke-on-Trent City Council with a £10.5 million emergency bailout – the authority's third in three years.

Council leaders asked for the 'exceptional financial support' (EFS) to help balance their budget in 2026/27, following previous requests in 2024 and 2025.

The government has now agreed in principle to provide EFS to more than 30 English councils, including Stoke-on-Trent.

EFS effectively works like an overdraft facility which allows a struggling authority to balance its books, when it might otherwise be forced to declare bankruptcy by issuing a section 114 notice.

The money has to be paid back, which councils will typically do by selling off land or buildings.

Stoke-on-Trent City Council has previously requested £42.2 million of EFS to cover the financial years 2023/24 and 2024/25, and £16.8 million for 2025/26.

Council chiefs included the latest EFS request in their draft budget for 2026/26, which also includes a maximum 4.99 per cent tax hike.

The city council's financial problems are largely due to its high level of spending on children's social care, with the authority looking after more than 1,000 vulnerable youngsters.

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Councillor Sarah Hill, cabinet member for finance, anti-poverty and corporate services at the Labour-run city council, put the blame on previous government funding cuts. But she insists that the city council's financial situation is improving, with the need for EFS 'tapering off'.

She said: "More than a decade of austerity cuts mean that, over the last 15 years, the council has lost around 25 per cent of our spending power. At the same time, we have seen sustained increases in demand for essential services.

"As a result, we were one of 35 councils left with no choice but to seek Exceptional Financial Support (EFS) in 2024/25. We always planned to taper off this support over a number of years. We are pleased the government is content with our plans.

"This tapering off reflects the hard work that has been done to drive down costs while protecting front-line services and investing what we have in the things that matter most to our residents. That work will continue.

"However, continued progress will depend on levels of need and demand, national policy requirements and economic indicators such as rates of inflation and interest rates.

"It is also important to understand that even if we are granted the amounts we have asked for, we will continue to drive down spending and will only draw on EFS if necessary.

"The fact we are granted £10.5 million does not mean we will definitely use the whole £10.5 million. But given the continuing financial pressures, it is prudent to give ourselves the scope to do so."

The city council's EFS request was low compared to some of the other councils which have received support. Croydon will receive £119 million in EFS in 2026/27, while Warrington will get £92 million.

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Ministers say their reforms to local government funding will help break the cycle of increasing numbers of councils requesting EFS.

Alison McGovern, Minister for Local Government and Homelessness, said: "People in deprived areas have been let down for too long, with councils in the poorest areas left on their knees and services cut back as a result.

"The support we're announcing is critical for the councils, and we are doing everything we can to ensure councils can balance the books including by making £78 billion available through the first multi-year settlement in a decade."

City councillors will be asked to approve the authority's budget for 2026/27 at a meeting on Thursday.