Cheshire East desperately needs to avoid a S114 notice [effective bankruptcy] because if government officials run the council residents' interests come second to balancing the books, councillors said.

Several councillors at yesterday's (Thursday) finance sub-committee meeting feared the prospect of a S114 notice could become a reality.

Cllr Ken Edwards (Bollington, Lab) said: "At the moment, I'm very, very gloomy, and I think that we're going to need the additional financial support…

"I do think we're going to need to continue to work on re-profiling the capital program.

"And other than that, frankly, I think we're crossing our fingers to avoid a S114 situation."

The council applied to the government in February for exceptional financial support of £17.6m.

One of the key requirements for that was it had to produce an improvement and transformation plan and submit it to the government – which it has done.

If the council doesn't rein in its spending it will have to use the conditional exceptional financial support to avoid the issuing of a S114 notice.

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Cllr Reg Kain (Alsager, Lib Dem) was unclear whether using the exceptional financial support – which incurs costs – would be better than issuing a S114.

He asked: "I want to know why exceptional financial support, which is going to still bring about the cuts that we're going to suffer, is a better situation than a 114 because, from where I'm sat at the moment, I can't see us really avoiding a 114 in the future…

"And I'm very sorry, but crossing my fingers is not good enough."

Other councillors warned a S114 was to be avoided.

Cllr Jill Rhodes (Crewe, Lab) said: "Exceptional financial support just requires us to increase our fiscal borrowing, but a S114 is commissioners coming in.

"Those commissioners have to be paid by the council, and you lose political control of your council, it is run by commissioners.

"So, democracy is probably not best served by a 114 notice and commissioners. That's my personal opinion."

Cllr Janet Clowes (Wybunbury, Con) said if members thought what the council was going through now is bad 'it is infinitely better to the violence of a slash and burn approach, which tends to be what happens when government officials come in, because basically all they're interested in is balancing the books, whatever it takes'.

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She added: "We need to do everything in our power to avoid a 114 .

"But on the other hand, it would be quite wrong to ignore the elephant in the room.

"It is there, and when we're talking about exceptional financial support, I think it is important that we identify that, in this report, it does actually refer to the potential of actually asking for more exceptional financial support.

"Now that comes with its own costs, as we've always discussed, but again, that would be a balanced decision that has to be made nearer the time when we know what the government settlement is going to be in December."