THE council is not facing imminent bankruptcy – but its long-term financial stability “cannot be guaranteed”.

That was the warning to members of Swindon Borough Council’s finance boss as the cabinet discussed an expected £5.7m budget funding gap by the end of March.

And deputy leader Russell Holland could not rule out job cuts to pay for it.

He presented a report which showed there was a forecast overspend on the council’s general fund budget of £18.7m – 12.5 per cent of the £149m budget.

That has been offset by government grants of £13m already received, leaving a gap of £5.7m. More support from Whitehall could be on its way.

Coun Holland said: “It is promising to recompense local authorities for lost income during the lockdown – we don’t know how much we will get – but I am hopeful it will be a substantial amount.”

His cabinet colleague Dale Heenan said the Adver’s reporting of the funding gap on Tuesday had been "sensationalist". He asked Coun Holland if the council faced bankruptcy.

Coun Holland said: “The council is not going bankrupt but its long-term financial security cannot be guaranteed.”

He said the authority already spend nearly 80 per cent of its budget on adult social care and children’s social services, and an ageing population meant the demand for social care were always increasing – meaning the current funding model for the council was not sustainable in the long-term.

Coun Heenan later tweeted figures suggesting the £5.7m hole in the budget could be cut to £2m by the extra government grant – although details of what might be refunded have not been confirmed.

But whatever the size of the funding gap, Coun Holland was not able to say job cuts would not be needed to close it.

Asked by Labour group leader Jim Grant whether cuts might follow, he said: “Officers will be looking to close the gap by looking to do things more efficiently, saving money that way; by moving more services online, saving money there.

"We will look at the capital programme and decide whether we can continue with things that are not fully funded.

“Compulsory redundancies are always the last resort, and will always be done through the proper consultation process, but I can’t say, hand on heart, there is no risk of potential redundancies.”

Council leader David Renard said a budget gap of low millions at this time of year was not unknown, but agreed with Coun Holland that further disruption or even lockdowns caused by a second wave of Covid-19 might be a significant threat.

He agreed to Coun Grant’s request to provide councillors with a copy of the letter written to the chancellor Rishi Sunak and secretary of state for housing, communities and local government Robert Jenrick urging a fair settlement of the council’s extra spending.