WARRINGTON Borough Council says it is facing an “unprecedented financial challenge” with a critical discussion set for the Cabinet meeting a week on Monday, December 8.
The Cabinet papers published demonstrate the most significant budget pressures the council has ever faced At Quarter 2, the Council projected a year-end overspend of more than £39 million.
Equally, the Council’s four-year budget plan (MTFP) projects needing to make further savings of up to £90m by 2029/30, requiring radical change and very difficult decisions.
To support the need for the Council to achieve financial sustainability, it is proposing speaking with the government about receiving extraordinary financial support (EFS) and increasing Council Tax above the referendum limit of 5%.
Alongside this, the Labour-Run Council’s four-year finance plan up to 2029/30 (its medium-term financial plan – MTFP), is forecasting an up to £90 million funding gap.
Because of the significance of the Council’s financial position, it will need to make a number of very difficult decisions about what services it is able to provide in future. And, while work has identified a provisional set of savings proposals across the MTFP period to 2029/30 (up to £41 million), the Council will need to seek financial support to allow it the time to identify further savings and make the organisation-wide changes required, to become truly financially sustainable.
Council seeking exceptional financial support
In its MTFP update, Cabinet is recommended to seek exceptional financial support (EFS) from the government. EFS is a short-term mechanism that allows councils facing severe financial pressures to borrow alternative funding to temporarily cover budget shortfalls.
The report also considers exploring options with the government to negotiate an increase in Council Tax, above the current referendum limit of 5%.
According to the report, Warrington currently has one of the lowest Council Tax rates among similar authorities. Warrington’s Band D rate at £1,867.80 is £51 lower than comparable councils, and is significantly below the highest rates, which exceed £2,000.
Warrington having lower Council Tax rates than many other areas is deemed to no longer be sustainable given the scale of the Council’s financial challenge.
Following on from a statement from the Labour Group issued this morning, Cllr. Denis Matthews, Cabinet Member for Finance, Assets and Investments, said: “We face the most difficult budget position in the Council’s history – it is an unprecedented financial challenge.
“The Cabinet report lays bare the stark reality of our medium-term budget issues, which will demand important – but very difficult – choices as we take our first steps to true financial sustainability.
“Our position reflects many local issues and a number of national challenges, with these national challenges most notably linked to service demand pressures across our people services. But, while these well-documented sector-wide issues are a challenge, we must be masters of our own destiny and make the decisions that we need to here in Warrington.
“We will need help to address our four-year, £90 million budget gap. Put simply, the money we receive in income is far less than what we are spending on services. This huge gap will need to be bridged, through making widespread service changes as a council, but also through seeking additional financial support from the government, which will buy us time to put things right.
“With the support of our ministerial envoys, we want to become a modern, efficient and well-run Council. But achieving this also requires us to be financially sustainable, which is going to require radical thinking. Many of our services will need to change and be redefined. But through this, we are committed to working more closely with our residents and communities to collectively look at ways we can work together across our neighbourhoods.
“With all of this in mind, Cabinet faces a critical discussion at our meeting on Monday, 8 December.”
The difficult decisions will come after a Full Council meeting on Monday (Dec 1st) when councillors will be asked to vote for an increase in their allowances and campaigners will be rallying outside the Parr Hall, asking the council not to close the Woolston Neighbourhood Hub, which requires an estimated £3m spending on it to bring it back into use.
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No thought was given to “working closely with our residents and communities to collectively look at ways we can work together across our neighbourhoods” by those who unilaterally decided to rashly borrow and invest in several questionable projects. Those residents who expressed their concern at the folly of investing in those doubtful projects were roundly criticised by the previous Labour administration. Many of current administration were members of that previous council.
They’re not unprecedented. In fact a lot of people predicted exactly this outcome, only to have the former CEO, leader of the council and councillors like Tony Higgins abuse them for it, often in the pages and interviews of this publication.
Ironically the Labour current administration honoured the leader of the previous administration (one of the main proponents for the misguided and ill considered investment “strategy”) for services to local politics. Some service, in view of the debt we are saddled with.