Jobs would be lost, services slashed and council tax could increase by ten per cent if Middlesbrough Council declared effective bankruptcy, an MP has warned.

MP for Middlesbrough, Andy McDonald, spoke out after the council’s Executive was told emergency financial help from the Government is now necessary to avoid a section 114 notice. Mr McDonald told the Local Democracy Reporting Service he was “100 per cent supportive” of the efforts to prevent that eventuality.

The council is battling to plug a funding gap of almost £6.3m for 2024/25 while facing dwindling reserves. Mr McDonald said the local authority was moving “heaven and earth to avoid the unthinkable consequences of bankruptcy.”

A request for exceptional financial support must be made to the Government this month, council leaders have been told. If they choose not to approve the move at a meeting next week, or financial aid is insufficient, a section 114 notice will be issued.

“The council is in an unenviable position of having to get the authority back on an even keel on the back of the myriad of problems it inherited following May’s local elections,” said Mr McDonald. “If exceptional financial support is the way to achieve that then there is a need for the council to be supported in that.”

In December, Tees Valley Mayor, Ben Houchen, Conservative MP for Middlesbrough and East Cleveland, Simon Clarke, and four Tory councillors wrote to the Government requesting commissioners take over control at the council. This call was repeated by Mr Clarke this week who said on social media: “The time has come for the Government to send commissioners to Middlesbrough Council, who have today admitted they cannot continue to run normal services without a bailout of millions of pounds.”

In response, Mr McDonald said: “I am absolutely horrified to see Sir Simon Clarke reiterating the call made by him, Lord Houchen of High Leven and their Teesside Tory chums, that commissioners should be brought in. Let it be absolutely clear what that would mean, if you know anyone employed by the council, a family member, friend, neighbour, then they would be at immediate risk of redundancy.

“Secondly, councils with commissioners have been putting council tax up by about ten per cent for all residents – while the council also needs to find the money to pay the commissioners, which it otherwise wouldn’t. Thirdly, all ‘non-essential’ services would be significantly slashed or simply stopped, such as leisure services, neighbourhood safety and street wardens, area care, parks management, school crossing patrols, environmental protection and adult day care, to name but a few.”

He said the council had been left with “cleaning up the mess they inherited” from the previous Independent-Conservative administration. Mayor of Middlesbrough, Chris Cooke, has insisted a call to send in commissioners was “a call to abandon Middlesbrough”.

In November, a survey by the Local Government Association revealed more than 60 councils in England believe they are at risk of having to issue section 114 notices in 2024. A DLUHC spokesperson has said they are “ready to talk” to any councils concerned about their financial position.