Leeds City Council approves £1.5m loan to mystery social care firm facing insolvency
Leeds City Council agreed to a bailout after the unnamed organisation, which looks after vulnerable adults, faced financial problems.
A social care provider will be handed a £1.5m loan by the council after it faced going bust.
Leeds City Council agreed to a bailout after the unnamed organisation, which looks after vulnerable adults, faced financial problems.
A deficit and cash-flow problems meant insolvency proceedings could be taken out in the first quarter of 2026/27
If the provider ceased operating, the local authority would be responsible for maintaining people’s care, a council report said.
It said: “The provider has therefore approached Leeds City Council for financial assistance.
“Local authorities do have discretion about how to meet needs in this scenario, and this proposal will negate any impact on service users, families and carers who access these services.”
The loan was agreed in principle by the council’s executive board after the organisation was deemed “hard to replace”, the report said.
It said: “This report recommends a maximum £1.5m loan agreement to support the provider to stabilise their cash balances whilst their financial recovery is implemented.
“In doing so, the council will ensure continuity of care without disruption.”
The loan would be repaid over a three-year period after the provider gave assurances over its financial recovery plans.
Further financial details and the name of the provider were deemed commercially sensitive and kept private.