Council finding it ‘more and more difficult’ to balance books

Wirral’s council leader said the authority is “finding it more and more difficult each year to find ways to balance the budget.”

Cllr Paul Stuart appealed for government support as analysis by the Local Government Association (LGA), a national group for councils, warns local authorities across the country face an “inflationary storm” and a national budget black hole of £4bn over the next two years.

Cllr Pete Marland, chair of the LGA’s resources board, said, “Councils remain firmly in the eye of the inflationary storm and severe funding and demand pressures mean that council finances are under pressure like never before.”

He added, “None are immune to the risk of running into financial difficulty and others have already warned of being unable to meet their legal duty to set a balanced budget and are close to also having to issue Section 114 notices.”

In Wirral, it will have to find £15m in its budget next year by cutting back or raising money as well as offset a projected £3.6m overspend in its budget this year. This overspend is being driven by adult social care and neighbourhood services.

Issuing a Section 114 notice, effectively bankruptcy for councils, is not expected in this financial year for Wirral but the latest savings will follow successive years of millions of cuts to Wirral Council services.

Over the next four years, current projections say the council will have to find nearly £70m to cut back on and a report said it could likely go bankrupt in three years. Officers have clarified this is just a prediction and is based on the very limited information currently available.

Leader of Wirral Council Cllr Paul Stuart said, “Wirral Council, like almost every local authority across the country, is finding it more and more difficult each year to find ways to balance the budget while also protecting services which the people of the borough rely upon and value highly.

“Inflation has added significantly to this difficulty. As many of our residents will recognise, costs for goods and services have rocketed up, putting even more strain on the authority’s finances, while local people have also struggled, which in turn adds even more to the demands on the council.

“I would urge the Government to act to help us protect frontline services and prevent councils from facing still more difficult decisions in setting their budgets.”

Wirral Council has been criticised in the past for its use of unallocated emergency reserves to help balance its budget with a current level of over £13m. The council is now overseen by a watchdog independent assurance panel and has taken steps to improve its finance management according to independent auditors.

However Conservative councillors have raised concerns about waste within the council and questioned whether council tax rises are needed to balance budgets.

Wirral has seen its budget cut by a quarter since 2010. Funding for the next financial year is also not yet known though some indication will be given when the Chancellor of the Exchequer Jeremy Hunt issues his Autumn Statement.

At the moment though, the local authority is working on different budget proposals which will be publicised ahead of committee meetings followed by a final vote of all councillors at the end of February.

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