Birkenhead Wilko closure puts council finances under further pressure

Wirral Council is set to lose money when Birkenhead’s Wilko store closes putting further pressure on the local authority’s income.

400 Wilko stores are set to close by early October after hopes for a rescue deal for the company collapsed. Distribution centres will close on 15 September and redundancy is now likely for all 12,500 workers across the company.

In a budget report ahead of a Wirral Council economy and regeneration committee meeting, an update for councillors said, “A number of assets retained as investment purposes will not achieve the anticipated income targets due to surrender or reduction in rents.

“These primarily centre around the Europa Centre, Birkenhead which includes the unit leased by Wilko’s.”

Wirral Council has declined to reveal how much will be lost from the closure citing commercial sensitivity.

Other units owned by the council that are currently empty are also having their futures assessed with holding costs and security being overseen by the local authority’s asset management team. The local authority also recently revealed it is reviewing the future of the Floral Pavilion in New Brighton.

The loss of income from Wilko will come at a tough time for the council as it is currently expected to fill a financial black hole of £15m in its budget. According to the BBC Shared Data Unit, there are planned savings of £28.4m or nearly 8% of its budget.

The average council across the UK now faces an average deficit of £33m by 2025-26, a rise of 60% from £20m two years ago. Decisions about how much funding councils get next year have not yet been made by the government but Wirral’s budget has seen a 25% cut since 2010.

Councillors have warned the local authority is in “a dire financial situation” and Wirral’s council leader Cllr Paul Stuart previously said, “I think our current financial circumstances does mean that there’s going to be services we’re going to have to look and potential assets that some people use and rely on at the moment that we’ll have to consider.”

While the council is under significant pressure to close its budget gap for next year, the economy and regeneration committee report said the council was not currently at the position where it might need to issue a Section 114 notice which would effectively declare bankruptcy.

Wilko is also not the only council asset expected to close in October. The Sail Loft Kitchen at the West Kirby Marine Lake is expected to close on 31 October if councillors vote to approve the move at an upcoming Tourism, Communities, Culture and Leisure committee meeting.

The venue, which last year lost £155,000 after being severely impacted by the West Kirby sea wall construction, is currently subsidised by the council. In 2022-23, it missed its income target by £50,000.

A committee report said, “High inflation and rising interest rates continue to place significant pressures on Council finances and restrict the ability to forecast and plan with confidence, for the future. Many factors are also affecting the spending decisions of consumers as regards to disposable income.

“There is no certainty that the fortunes of the venue will improve in the foreseeable future. A decision to close the venue, however, constitutes a realistic measure and mechanism to produce a saving and enable an income via a commercial lease, whilst supporting an alternative solution for the sustained use of the facility.”

Council officers will then look to find another commercial lease for the property to take over in the spring or summer of 2024 if the closure is approved.


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