Stoke-on-Trent City Council has warned it is on the verge of effective bankruptcy as it called for a ‘national overhaul' of social care funding.

The council is facing a budget gap of £8.5m this year, which will leave the authority at ‘significant risk' of not being able to agree a balanced budget next year.

Cabinet member for finance and corporate services, Alastair Watson, claimed the current administration had inherited a 'very perilous financial situation'.

He said: ‘We've hit the ground running in these four months – getting on top of illegal dumping and clearing a longstanding fly-tipping backlog that's been plaguing residents; prioritising early intervention and prevention services such as a new family hub model to provide better, more sustained social care; delivering a five-year investment programme into council housing; and tackling anti-social behaviour in our communities.

‘We've done this while insisting on tight spending controls in response to the financial position we've inherited.

'So far, we've reduced a potential £13m budget gap down to £8.5m, but, as it stands, with record numbers of children in care, with high inflation that increases the unit cost of care for children and adults along with the cost of so many goods and services that we purchase for the benefit of residents, we are spending more money than we can afford – we cannot sustain services like this.'