Budget approved with 4.98% council tax rise despite Tory claims enormous debt is like “Titanic heading for an iceberg”

WARRINGTON Borough Council’s budget was approved at a stormy meeting at the Parr Hall as Labour’s 4.98 per cent council tax rise was approved despite opposition from local Tories.

Conservative Councillors voted against Labour’s 2024/25 Budget which will take budgeted borrowing to £2.1Bn in 2024/25, saying the “enormous debt” was like “the Titanic heading towards an iceberg!”

Tory councillors were dismayed as Labour and supporting Liberal Democrat councillors failed to grasp the seriousness of the financial situation which they had brought upon Warrington Borough Council.

But Labour’s finance spokesperson Cllr. Denis Matthews said: “I would like to thank all councillors who took part in the debate yesterday evening.
“While we may have differences of opinion, the agreement of a legal balanced budget is essential.
The people of Warrington rightfully expect its Council to be there for them when needed, and to deliver the services upon which we all rely.
“All councillors are elected to serve our residents, and this privilege comes with responsibilities. Working together to agree a balanced budget is one of them.
“The local government sector finds itself within a perfect storm of factors – including record high inflation, increasing demand for services, and a National Government who seek to blame rather than support. This makes the delivery of a balanced budget seemingly impossible for some councils. Thankfully, Warrington is not one of them.
“Seeing a budget for 2024/25 and beyond has never been more difficult. Councils across the country are asked to deliver more and more whilst at the same >me receiving less from central government.
“In 2010, WBC received £70 million in Revenue Support Grant funding from the Government – this forthcoming year we receive £1.9 million- so a reduction of more than £68 million – a 97% drop. Thus, the Conservatives have taken £68 million in funding away from hardworking families here in Warrington.
“Warrington Borough Council can balance its budget despite Conservative austerity because
of our investment portfolio. The £23 million surplus profit goes directly into supporting Warrington’s most vulnerable residents, with more than 70% of every pound we spend going into things like protecting vulnerable children and adult social care.
“The Labour Administration are acutely aware of the pressures experienced by all Warrington residents during the cost-of-living crisis that we face. The proposal to increase Council tax by 4.98% has not been taken lightly, but when the Conservative government have worked on the assumption that all councils will use the maximum increase possible, and our settlement funding basis per dwelling is one of the lowest in the region, it would be negligent not to take this ac>on in order to ensure we meet our legal duty to agree a balanced budget. The people of Warrington deserve a long-term fair funding settlement from the Conservative government to reduce reliance on council tax increases.”

But Conservative spokesperson for Finance, Councillor Ken Critchley commented that it seemed incredible for Labour to present a business-as-usual budget when the Council’s own risk experts concluded that the risk of financial instability leading to a Section 114 notice (bankruptcy) and other unpalatable financial consequences was probable. The budget was little more than a copy and paste from the same budget model used in previous years.

Cllr. Critchley urged the Labour Leadership to listen to the many outside voices calling for change. He reminded the meeting that WBC’s External Auditors had said “we remain of the view that debt over £1.6Bn is not affordable, prudent and sustainable over the long-term for the council.”
He repeated the recent comments from the Under-Secretary of State for Local Government who wrote to the last Leader of WBC saying: “as you are aware, we have been engaging with the Council due to its high levels of debt and extent of commercial activity, on which measures the Council is a significant outlier. As of March 2023, the Council’s debt is £1.8Bn which is 9.9 times the Council’s core spending power (CSP). In perspective, this compares to the median debt to CSP ratio of 1.4 for unitary councils and, relative to size, is the second highest level of debt for a unitary authority after Thurrock and more than double that of Slough. Such levels of debt present significant risks to the Council and public finances.”
In response to government requests WBC has recently submitted a proposed action plan which should contain proposals for how it can reduce and manage its debt. However, WBC leadership has chosen not to share this action plan with opposition councillors, and this year’s newly approved budget now shows that Labour plans to continue increasing WBC debt to £2.1Bn by 1 April 2025, and to almost £2.3Bn by 1 April 2027.
After the meeting Cllr. Critchley added, “This Council, with its enormous debt, is still, like the Titanic heading for the iceberg, it’s not listening, it’s not changing course, and it’s not slowing down.”
By law, Council budgets are required to be “balanced”, and this means that planned expenditure must be matched by planned funding. However, in his speech Councillor Critchley challenged some of the budget figures, which he said looked like they were significantly understated. This would raise serious concerns over the budget process and whether the figures being presented really represented a balanced budget.”

Meanwhile, the Liberal Democrat Group supported the 4.98% increase in Council Tax proposed by the Labour administration at the Budget Council meeting on Monday.
Finance Spokesperson Cllr Ian Marks said, “The economy is in a bad way and our national productivity is poor. We are now in recession and Gross Domestic product is predicted to grow more slowly than in most other G7 countries. The Joseph Rowntree Foundation says six million people are in deep poverty. Our public finances are in a terrible state and a cross-party committee of MPs has warned that England’s councils are facing a financial crisis that is out of control. Even well-run councils are at risk of going bust in the next two years. Contrary to alarmist reports in the media, Warrington Council is not on the verge of going bankrupt. Headlines like ‘financial chaos’ damage the reputation of the town and will discourage firms from investing here.
“Liberal Democrats passionately believe in the value of public services. With ever-increasing financial pressures we agree with Labour that creative ways must be found to generate income to safeguard these services. We support many of the investments made by the Administration like housing, solar farms, Birchwood Park and regeneration but not risky investments like the energy company and the bank.
“We need better governance, openness and transparency but it is ironic that the external review of governance carried out last February has still not been released by the Government. All we have is a leaked confidential letter from a government minister which we suspect may bear little relationship to the report when it is actually released.
“Setting budgets is extraordinary difficult these days because of all the cost pressures and constraints. There is very little room for manoeuvre. In the past we would have prepared an alternative budget but those days are long past. To balance the books, we accept that reserves must be used but these can only be used once. The Tories repeatedly come out with negative comments but refuse to tell us what their budget is. All they do is submit a huge document with masses of amendments, an hour or so before the meeting which no-one has had a chance to study and then express surprise that we not taking them seriously.
“We have a number of suggestions for the budget but overall we accept an increase of just under 5% which is the level of increase the majority of councils are agreeing.”
“After the meeting, Group Leader Cllr Bob Barr added. “Regardless of political colour, it is the responsibility of all Parties to pass a balanced budget. The Conservatives voted against the budget which just affirms they don’t care about the vital services the Council provides for the people of Warrington. Their speeches were all about financial matters like assets, treasury management strategy and risk with barely a mention about people’s lives and how many are struggling to cope in the current climate.”