DEBT hit Warrington Borough Council could be facing a £29 million overspend by the end of the financial year, devastating forecasts reveal.
The authority’s quarter 1 budget monitoring projection was thrashed out tonight (Monday) as its Cabinet heard it could be facing a huge projected overspend by the end of the financial year.
Cabinet minister for corporate finance, Cllr Denis Matthews said in February 2024 when the council approved the £194.29m budget it had to make huge savings by the financial year end in March 2025.
And the council had been required to achieve millions of pounds of savings already in its budget set against a background of increasing social care demand.
“This funding pressure with increasing demand is the same for councils across the country,” he said. “The Local Government Association has multiple cases of pressure on councils costing billions of extra funding.”
He said rising inflation, increased energy costs and demand on social services had put many councils “on the brink of section 114 notices.”
This means councils are effectively bankrupt.
Cllr Matthews said the BBC had found that the average deficit for councils in 2025/6 was likely to be £33m.
Warrington Borough Council had taken measures to address “historical robust” financial pressure and “mitigate overspending very successfully in the past”, he added
He said they had “identified where savings can be achieved” with “rigorous financial management.”
In total, the forecasted overspend is £28.985m, Cllr Matthews said.
Last year, the overspend was £12.6m. He said the position was reflective of the “national issues with adult and children’s social care and homelessness.”
“To be crystal clear, the council financial programme is not contributing to the position and it had helped manage the pressure.
“The £23m profit (from the council’s investments) had helped support essential services and without that our financial position would have been significantly worse.”
He said “This has not yet happened and it is an early estimate of our current trajectory.”
Cllr Matthews said it was “an early warning of issues on the horizon that need to be addressed.”
He pointed out that if the council had opted to dip into its reserves to plug the gap “it would leave £54.515m which would greatly weaken the council’s resilience.”
He admitted “urgent action is now required to address the overspend” and “clearly difficult budget decisions” will be made.
In order to address the issues, a monthly budget meeting will be held with Cabinet members and senior leadership at the authority.
The financial position will be reviewed “on a weekly basis”, he added.
Among measures will be a “deep dive” to review costs. A programme of redundancies will be offered across the authority in collaboration with trade unions.
“A longer-term consultation will be required with a transformation programme in order to deliver effective services.”
He explained by acting in a “clear and transparent way” they can reassure residents who rely on essential services.
He went on to outline how national finances were left in a “shocking position by 14 years of Tory mismanagement.”
He called for long term reform so councils can build resilience and manage the pressure on local government.
Labour leader Cllr Hans Mundry emphasised the overspend is a forecast. “It is through 14 years of neglect that puts us in this situation,” he said, referring to the outgoing Tory government.
“We need to take action now to make sure the deficit doesn’t become a reality,” he added.
He criticised former Prime Minister, Boris Johnson, for failing to deliver on promises he made in 2019 on social care.
Cllr Maureen McLaughlin said there was pressure in Warrington as “the population is ageing faster than most as a lot of people moved to the New Town and they are retiring and getting older and need support.”
She called on measures to allow people to be as independent for as long as possible to reduce pressure on social care.
Cllr Hitesh Patel said: “We don’t come in as councillors to cut services.”
He admitted previous concerns about borrowing “shedloads of money” because without the income from the investment, the authority would “have to do something much more drastic.”
He said Warrington has one of the lowest council tax rates in the region.
Cllr Hans Mundry said the investments had generated “over £100m for the people of Warrington.”
For example the council faces:
• A projected £7.6 million overspend across adult social care, due to more adults needing help as part of Warrington’s ageing population. £5.8 million of this is due to the council needing to deliver more care packages and care support for people
• An overspend of around £11.7 million across children’s services. The vast majority of this overspend is for children in care, because there are more young people and children that need help and protection, but it’s more expensive than ever to get the right support in place
• A £4 million budget pressure on providing help to people with special educational needs and disabilities (SEND)
• A £1.8 million budget pressure caused by an overspend linked to providing accommodation for people at risk of homelessness
In January 2024, independent research from Grant Thornton suggested 40% of councils could face “financial failure” over the next five years. The Local Government Association also stated their belief that due to a funding gap of £6.2 billion, one in five authorities may need to issue a section 114 notice – effectively declaring themselves “bankrupt” – this financial year or next due to a lack of funding.
Equally, out of the 20 councils in the region, Warrington is the second most poorly funded place per home, receiving £360 per home, compared to the regional average of £829 per home.
1 Comment
If WBC hadn’t been reckless in it’s spending since 2010 ie investments then perhaps they wouldn’t find themselves in this position