Councillors have approved their authority's budget for the coming year – including a 4.99 per cent tax hike and a £16.8 million bailout.

Stoke-on-Trent City Council's Labour leaders said their budget would help stabilise the authority's finances without requiring compulsory redundancies or major cuts to frontline services.

But opposition Conservatives condemned the request, recently approved by government, for another £16.8 million of 'exceptional financial support' borrowing, accusing Labour of running a 'payday loan council'.

Elected members voted 29 to 11 in favour of approving the budget at Tuesday's full council meeting.

The council tax rise – the maximum allowed without a referendum – will include two per cent ringfenced for adult social care.

Band A households will pay an extra £53.85 to the city council in 2025/26, while Band D households will pay £80.75 more.

The budget also includes £7.5 million of savings, including £1.1 million of cuts affecting frontline services which were subject to a public consultation. These include plans to dim some streetlights and increase leisure centre charges.

Cllr Alastair Watson, cabinet member for financial sustainability, told the meeting that in 2023 the new Labour administration had inherited services which had suffered from years of austerity funding cuts.

He said: "Two years on we have steadied the ship but we remain in choppy waters. I'm pleased to announce that we are delivering a budget today with no compulsory redundancies. With local councils across the country facing dire financial challenges, being able to stand here and assure members that our workforce will be protected, enabling them to keep doing their vital jobs, is not something to take for granted.

"Efficiency savings, budget adjustments and back office savings, many of them unexciting, make up the package before us.

"There will be a council tax increase of 4.99 per cent – in line with the vast majority of councils across England – and some borrowing – it's less than what was originally expected, but it will still need to be paid back.

"Although it has been budgeted for, we don't want to use it. We want to see an outcome at the end of the year where we come in under budget. And with the fairer funding review coming alongside three-year settlements, I hope to see no EFS being used next year."

Much of the city council's current financial problems are due to the amount spent on children's social care – council leaders plan to use £11 million of the EFS loan to cover the cost of children's care placements in 2025/26.

But Cllr Watson insisted that this situation was improving, with the number of children in care now falling following previous investment aimed at bolstering early intervention.

Opposition Conservatives accused Labour of mismanaging the council's finances and failing to make difficult decisions, saying that Stoke-on-Trent taxpayers would be left having to pay back the EFS borrowing for years to come.

Conservative group leader Dan Jellyman said: "We have Labour Chancellor Rachel Reeves agreeing to loan the council another bailout, which makes this council a payday loan authority – £16.8 million this year, and including the bailout last year, that means £10,000 a day in interest payments, £10,000 a day that city taxpayer are paying.

"Last year we on this side took the pragmatic view of supporting their request of government, because we understood that key services had gone through a transformation, and may need extra financial support. Labour assured us that it would just be a safety net – maybe they'll use an odd million here or there, but we're not going to max it out.

"But what's happened 12 months later? They've maxed it out. And out of the £16.8 million bailout, £2.8 million will be for paying interest on the last bailout. If that's not a payday loan council, I don't know what is.

"Why are they maxing out the credit card? It's simple – they haven't got a grip on services. We've seen that with adult social care, where they've recently been taken to court, where they lost, because they weren't managing the contracts correctly."

But council leader Jane Ashworth blamed the authority's current financial problems on the austerity cuts of the previous Conservative government.

She said: "The city council has been deprived of investment from the Conservative government from 2010 onwards, which amounted to reduction in spending power of about £95 million a year. That is something like £280,000 a day – and now you have the audacity to throw at us the suggestion that we're increasing debt."