Wirral Council faces £12.5m budget challenge

Wirral Council is expected to go over budget by £12.5m this year as it continues to be in “a serious financial position“.

Budget reports released ahead of committee meetings next week detail how the council plans to offset its budget black hole over the next financial year.

Every year councils have to balance their budgets or avoid declaring bankruptcy and to do this, it can involve offsetting losses or costs through Council Tax, raising income, cutting services, or using reserves.

Documents brought before the local authority’s environment, climate emergency, and transport as well as economy, regeneration, and housing committees said, “This is a serious financial position for the council that needs to be significantly mitigated in-year through all available measures to reduce expenditure and generate cost savings.

“The source of the overspend reflects the outturn position from 2023/24 for which an action plan has been developed and implemented. This is designed to address the main issues generating the adverse position and progress will be reported on this in all future reports and to the relevant committees.

“However, the majority of this overspend is a consequence of increased demand and costs for social care services and will not be easily resolved.”

The local authority plans to manage its budget position this year by using emergency contingency budgets, using receipts from selling land, as well as earmarked reserves. However council officers warned, “It is not a sustainable position going forward and will adversely impact budget planning for 2025/26.”

Economy and housing is currently projecting a balanced budget for its departments though Environment and Transport is expected to overspend by £400,000. This is being driven by an overspend in the council’s highways department after developers failed to contribute promised funds.

The report said there is also a £300k shortfall in parking income “unless a new parking charging policy is approved and implemented promptly to balance the parking budget”.

Ahead of a major review of bin collections, the UK Government has awarded £2.377m for food waste to help with the recycling of food waste which is expected to be rolled out.

According to the report, inflation is currently looking positive and its expected interest rates will drop from the current 5.25% to around 3% by late 2025. It said overall the economy was more stable but “there remains a great deal of uncertainty”.

Written before the general election, the atatement added, “The results of the UK general election will play a pivotal role in determining the economic trajectory in the coming financial year. Regardless of which political party is successful, the election outcome will influence a range of factors, from fiscal policies and public spending to trade relations and regulatory frameworks.”

Following the general election held on 4 July that saw a Labour government elected, Wirral Council leader Paul Stuart said, “We are business as usual until we are told otherwise. We’ve got a new government that is coming in now. They will be having a look at what they’ve inherited.”

A Labour councillor, he added, “I have to believe a Labour government will be far fairer with local authorities than we’ve seen for the past 14 years.”

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