Sligo County Council yesterday voted by a margin of one vote to seek a €7.5 million loan amid claims that the local authority is on the verge of bankruptcy.

This follows the Department of the Environment’s rejection of a recommendation by independent consultants Grant Thornton that the beleaguered Sligo authority get a €10 million State bailout to ensure its survival.

Sligo County manager Hubert Kearns said yesterday it was time for an examination of how local government is funded, given the healthy finances of some local authorities on the east coast. This was a political issue that had to be discussed. There was an issue of whether in difficult times “the rich should help the poor” and this was a decision for Government.

The council has a capital debt of about €73 million, while its revenue deficit is €13 million.

In a letter to the council from the department, received at yesterday’s meeting, sanction was given for the conversion of an overdraft to a term loan.

The proposal to seek the €7.5 million loan was rejected by Fianna Fáil, Sinn Féin and some Independent councillors, and approved by Fine Gael and Independent chairperson Veronica Cawley and so was carried by a single vote.