Council faces unexpected costs from ‘unpaid bills’

Wirral Council has revealed it is liable for up to £200,000 worth of unpaid bills related to the pandemic.

At a Policy and Resources committee meeting on 4 October, Cllr Jean Robinson asked about a series of invoices cited in the local authority’s latest budget report related to the pandemic it hadn’t paid off.

The costs related “specifically to covid activities for FM (facilities management) services across all Directorates” and “covers operational orders for security, cleaning and removals.”

In response, the council’s chief financial officer Matthew Bennett said, “There are some unpaid bills that have come to light that do relate to the covid period that should have been paid in the previous year but they haven’t been.

“We are liable for those costs and we will need to make payment for them so they will add to the pressure in the current year.”

While he was not able to provide the exact figure at the meeting, he said the money was “somewhere between £100,000 and £200,000 so it is quite significant.”

The additional payments will add further pressure on the local authority’s budget. Current forecasts predict it will go over budget this year by 1% or £3.6m with adult care and neighbourhood services being the biggest drivers.

The local authority also expects a budget gap of £14.9m in the next financial year 2024-25 which it will need to fill. Unlike national government, councils face restrictions on borrowing and cannot do it to finance day-to-day services.

Inflation also looks to be a big issue going forward, expecting to add at least £14m to the council’s budget for each of the next four financial years. Other pressures relate to services and population changes in Wirral.

Despite the pressures, the local authority is on track to make 93% of the £28m savings and cuts approved for this year. The outstanding £2m is expected to be achieved through other means.

Though the report also predicts the council will very likely go bankrupt in three years and not be able to balance its budget, Mr Bennett stressed this was “an indicative position based on very limited information.”

This is due to the fact councils do not know what funding they get for the next financial year until the late autumn or longer term funding for the years beyond that.

In order to balance the budget this year, residents could see another council tax rise of 4.99% with 1.99% going towards adult social care. Concerns were raised by Cllr Jeff Green about whether this would be set in stone if the report was approved but was told this was not the case.

The council also approved works to be carried out to move services to the Birkenhead Commercial District, new office space built as part of the council’s regeneration plans. £5.4m was approved in 2020 as well as an additional £4m for the move which is expected to take place by April next year.

The council will also negotiate a lease for basement space in the Cheshire Lines building for the local authority’s archives and record service. If a contract is not secured, the archives will be moved to an external storage company.

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