Cheshire West and Chester Council faces a funding black hole of more than £47m over the next four years.
A medium-term financial strategy due to be outlined to the authority’s ruling Cabinet next week has revealed the scale of the shortfall and said ‘significant transformational activity’ will have to take place in order to help deal with it.
According to the report, the overall shortfall comes in at a predicted £141.3m between 2024-28, this takes into account predicted government grants minus expected increased costs in departments such as adult and children’s social care, along with an allowance for national pay awards and pension contributions.
Some of that shortfall will be offset by council income – including things like council tax – of £44.7m. The authority also plans to make budget savings of £49.2m, but that will still leave an outstanding shortfall of £47.4m.
The report said, “The scale of the challenges over the next four years will require key long-term policy decisions to be made at the earliest opportunity if the council is to remain financially well managed and financially resilient.”
The document warns that the financial resilience of councils has gained a higher profile in recent years, with an increasing number of councils now facing financial difficulties.
In addition, it said the continued uncertainty surrounding local government funding and the pressures facing social care services for both adults and children, the current cost of living crisis and inflationary pressures, within a backdrop of economic recovery from Covid-19, has the potential to impact further on the financial resilience of many councils.
It added, “Whilst it is considered that the council is in a relatively strong position compared to some others, it also recognises that dealing with these challenges is becoming increasingly difficult against a backdrop of increasing demand led pressures, uncertainty around the national economic situation and around central government support.
“In order to maintain its financial resilience, the council will need to undertake significant transformational activity over the short to medium term.”