Halton Council could face bankruptcy without more government support to meet its £17.5 million coronavirus bill.

The local authority has joined with other councils in the Liverpool City Region to demand more help from Westminster, saying years of austerity have left it unable to meet the cost of the pandemic.

Although Halton is not currently considering issuing a section 114 notice, a formal admission that a council cannot pay its bills, finance chief Cllr Mike Wharton said the position “is being monitored closely”.

Despite the projected cost of the crisis, the government has so far only allocated Halton £7.9 million in extra coronavirus funding, leaving it almost £10 million short of its projected costs.

Like other councils in the region, the local authority also saw its allocation reduced between March and April as the government changed the way it allotted funds from needs-based to population-based.

Cllr Wharton said: “The council’s position going forward will be heavily influenced by the government’s willingness to fully fund COVID-19 related costs and their approach to the future funding of local government. 

“The council will therefore continue to work with the LCR metro mayor and local authority representative bodies, to strongly lobby government to fully fund all of the council’s additional costs from supporting its residents and businesses during the COVID-19 crisis and beyond.”

The government has described its support package for the region as “significant” and part of a national £3.2 billion in extra funding for councils.

Even before the crisis, Halton was struggling financially.

The council has exceeded its budget for the past three years and has suspended all non-essential spending since November in an effort to bring a £6.1 million budget black hole under control.

Cllr Wharton said he now expected last year’s deficit to be between £4 million and £5 million, but with only around £5 million left in its reserves this has left the council dangerously short of funds.

He said: “As a result of the cuts in the council’s funding since 2010 due to the government’s austerity measures, Halton now has very limited financial reserves which are in the main committed for specific purposes.”

If the council does have to issue a section 114 notice, this will ban all new spending except on statutory services to protect vulnerable people.

Several other authorities have also warned that they risk bankruptcy if they do not receive more funding to meet coronavirus costs.

Mayor of Liverpool Joe Anderson said on Thursday that his council could issue a section 114 notice at an emergency budget meeting in June, while in the south Windsor and Maidenhead council is also understood to be considering a section 114 notice.