WARRINGTON Borough Council will need to make savings of £40.5 million over the next four years – without taking into account additional pressures arising from COVID-19.
This is the forecast made in a report of Cllr Cathy Mitchell, deputy leader of the council and lead member for corporate resources (pictured) to a meeting of the council’s cabinet next Monday (July 12).
More than £23 million of the savings will be required in 2022-23, the report states.
In making the forecast a number of assumptions have been made.
In recent years, the Government has used one-year rather than multi-year settlements to fund local government together with additional one-off allocations for Revenue Support Grant to cover immediate demand pressures in areas such as adult social care.
“This approach means there is inherent uncertainty about the continuity of funding allocations and amount when planning for future years.
“On this basis and at this stage of the budget planning process, it is forecast that there will be no one-off funding (albeit that, as in previous years, this position may change later in the year (December) when the local government funding settlement is announced) and that New Homes Bonus funding will progressively reduce to nil.
“Over the four-year period, Central Government funding is forecast to be minimal. Funding is expected to come largely, if not wholly, from locally determined sources, namely, Council Tax, Business Rates and inflationary increases in Fees and Charges.
“Council Tax income is modelled to increase by 1.98 percent annually together with an annual increase of 400 in the tax base. Government consideration of funding system reforms, including a move from 50 per cent to75 percent business rates retention, have been placed on hold. In light of this, funding from business rates has been modelled to increase by 0.6 percent annually.
“Fees and charges inflationary increase has been estimated at three percent annually.”
The report adds: “The council has made £173 million of budget reductions since 2010 – equivalent to £1,845 per Warrington household.”
The formulation of the 2022/23 budget will be influenced by the continuation of the major cutst hat Central Government has imposed on Local Government since the 2010 Spending Review, compounded by other and more recent factors both national and international.
“It has long been recognised that the methods applied to the funding of Local Government are in need of overhaul and change, however, the outcome of a Fair Funding review and the implementation of business rates system reforms scheduled for previous financial years have been placed on hold. Additionally, there is no Central Government strategy for the longer term funding of Adult Social Care demand. The use of an Adult Social Care precept to raise additional funding is not sustainable and perpetuates a mismatch between increasing local Adult Social Care demand and local ability to raise extra funds.”
The council’s cabinet will be recommended to note the position and challenges faced on the delivery of a balanced budget over the four-year period 2022-23 to 2025-26.
