A council has asked the government to extend its exceptional financial support flexibilities for another year.

Twelve months ago Southampton City Council was given in-principle approval to borrow up to £121.6 million to cover revenue costs in 2024/25.

The support in the form of a capitalisation direction related to five areas – a structural budget deficit, transformation costs, redundancies, potential unforeseen events and an equal pay claim liability.

Council leaders have said the amount of money that needs to be borrowed for the 2024/25 budget will be around half the £39.3 million initially allocated and a balanced budget can be set for the coming financial year using the local authority’s own resources.

However, the support is still needed for the equal pay claim, transformation programme and redundancies as a result of service restructures.

Deputy leader and cabinet member for finance Cllr Simon Letts said: “We have requested to government that we are able to roll the EFS application forward.

“Not because we need it to set a balanced budget, but because its purposes were four-fold and some of those purposes are yet to be nailed down.

“The principal one there is the equal pay issue, which we are still in a negotiation position with our trade union colleagues and we expect a firm number to emerge from that process, probably end of March, beginning of April.

“We were hoping to get that done in this financial year but it’s a negotiation.”

The council has permission to borrow up to £52 million for the equal pay claim liability, which relates to different working practices that were in place across the organisation for a number of years.

Cllr Letts said the number of redundancies the council expects to make through transformation was “significantly lower” than the initial officer estimation.

The exceptional financial support included £12.2 million for restructuring costs, but Cllr Letts said the amount needed could end up being in the region of £2million.

Latest projections are for 135 to 159 full-time equivalent roles to go over the next two years.

Seventy-four of these could involve vacant posts meaning there would be between 61 and 85 redundancies.

The spend on the transformation programme to date had enabled the local authority to have “real confidence” in the project, Cllr Letts said.

Southampton City Council expects to find out if its request to extend its exceptional financial support package into 2025/26 has been accepted by government before the end of February.

Cllr Letts said it would be more difficult for the council if the extension was not granted but financial officers had given him confidence that the authority would still be able to balance the books without it.