EFS should not be the ‘only option’ for struggling councils, says new SIGOMA chair

Posted on July 16, 2026

Speaking to Room151, SIGOMA Chair, Mayor Chris Cooke, called for reform of Exceptional Financial Support, warning it should not be the “only option” for struggling councils. He also highlighted the need to embed fair funding principles, widen the focus on social mobility, fully fund SEND reform and address social care pressures through fairer funding and stronger regulation.

"The new chair of the Special Interest Group of Municipal Authorities (SIGOMA), Chris Cooke, has called for reform of exceptional financial support (EFS) among a list of short- and long-term local government finance issues he is aiming to work with the emerging government to address.

Cooke, who is mayor of Middlesbrough, tells Room151 that many of the councils that have applied for EFS “felt that that was the only option” given to them – when in fact “there are much better tools” to deal with the problems EFS is intended to address.

“EFS feels like a really blunt tool that ultimately, over a longer-term period, can do more damage than good,” he says. “I think there’s a misunderstanding of what EFS means for councils, and I think if there was a deeper understanding of what that meant, I think less councils would apply.”

Instead, Cooke thinks a better solution would be for government to work with councils on an individual basis, to work out what is driving the financial struggles or underfunding of certain services that is potentially leading to large overspends.

“Ultimately, we need council tax reform, business rates reform, and to find a way to devolve some of the funding, where it is in that area’s interests, as opposed to increasing borrowing and removing any possible revenue fluidity that you have, because you’re now going to spend that servicing the debt,” he adds.

“That doesn’t seem like that ultimately gets you to a better place.”

Cooke also says that the pressure to sell off assets to repay EFS “can often lead to decisions that a council wouldn’t normally take, with them becoming less strategic and more knee-jerk”.

A big part of the problem has been the way section 114 notices have been framed in recent times, becoming a “tool that was used to hit councils over the head with”.

If used correctly – or at least in a more considered and appropriate way – s114s could have been used to better help councils and get to the “deep-rooted reasons that led to them”.

“What we should do with every one of those scenarios is to gain the understanding, but also try and implement policy that then ensures [the key issue] doesn’t happen again,” Cooke states.

“If there was to be regulation over joint venture agreements or investment into certain projects [in one case], why isn’t that then in some way regulated across the board? There is a learning that can be taken from those situations that can then be applied on a wider basis.

“If it starts to become supportive and a learning experience, I think everyone gains from that. Whereas what it currently feels like is quite a punitive process.”

Longer-term fixes

The start of Cooke’s term as SIGOMA chair coincides with the ascendancy of a new prime minister, and a reshuffle of ministerial roles that could impact the Ministry of Housing, Communities and Local Government.

Cooke is keen to work with the new government to “start to transition some of what was initially put in as a short-term fix into long-term financial sustainability”.

The Recovery Grant, for instance, must become permanent, he says. It certainly cannot continue with that name otherwise it will “feel more optional or like something that’s been added on, whereas that was a mainline piece of funding that was required in order to bring sustainability to some councils”.

Cooke is also aiming to ensure that the principles of the government’s fair funding review continue into the future.

“A government that comes in and refreshes the indices of multiple deprivation should then also use that data to inform decision making,” he says. “To not do that would be remiss on the whole project that they’ve just embarked on.”

He will also call for widening the focus on social mobility “because poorer communities in places in the north, for example, will still not fare as well as poor communities in the south because they are able to gain opportunities quickly and more efficiently”.

Another areas Cooke thinks needs continued focus is special educational needs and disabilities (SEND) reform, and for “assurance over a long-term period about what that’s going to be”.

That includes what happens with the 10% not including in the government’s pledge to take responsibility for 90% of historic Dedicated Schools Grant (DSG) deficits, but also accounting for the continued increase in demand for SEND services.

“Writing off 90% of [the deficit] doesn’t necessarily help with the future demand,” he says. “We need to make sure the system is fully reformed, fully funded, and it needs to be the case that it will work almost systematically to ensure that the system works a lot better, and in collaboration with [other partners].”

Work will also need to be done to determine “the process for what happens in situations where councils are racking up these debts in their budgets, that feel disconnected from the rest of the council’s medium term financial plan (MTFP)”.

And while he supports government attempts to crack down on “excessive profiteering” by social care providers, he says there is “a belief that that needs to go much further”. He says: “Any sort of statutory service or statutory provision should not see excessive profiteering; there should be a reasonable level of charge for those services.”

On social care specifically, Cooke says collaboration among councils has worked to some extent to regulate the market, but there is only so much they can do to “hold the line”. “It is one of those things that needs to be both fairly funded, but also regulated a lot more. But local councils are still well placed to be able to deliver social care,” he says.

Working with government

Asked what a ministerial reshuffle might mean for local government, Cooke acknowledges that it would be “helpful” to have a local government minister with experience of more financially deprived councils.

Ultimately, though, he thinks the key is “getting the balance right” between secretary of state and local government minister and “ensuring a good working relationship” with groups like SIGOMA “from the very beginning”.

With local government reorganisation (LGR) and devolution firmly on the government agenda, Cooke says another of his goals will be to “help shape” what these ultimately look like, working with central government to do so.

“One of the things that we need to be really clear on is what does the model actually look like by the time we get to the end of it. It needs to be proper devolution and that proper power of place. And it doesn’t quite feel like we’ve articulated that enough,” he says.

Within combined authorities and the ultimate government goal of mayoral strategic authorities, the role of councils needs to be clear.

“It feels like that’s missing a bit,” Cooke thinks. “There’s a lot of talk about mayors. There’s a lot of talk about the communities, and then there’s a missing gap in the councils and their involvement. I think we need to get much better at understanding what that dynamic is.”

Reflecting on all of his initial goals as SIGOMA chair, Cooke thinks the new government will be “receptive” to the organisations asks and ideas.

“I don’t think it’s going to be an uphill struggle,” he says. “A lot of the work has already been done and the really hard yards have already been taken. It’s about cementing this, but also improving that position.”"

You can read the full article in Room151 here.