Local authorities facing cash crisis - The Leamington Observer

Local authorities facing cash crisis

Ryan Smith 11th Oct, 2023   0

A SHOCKING report claiming Warwickshire County Council was at risk of being swept up by a region-wide cash crisis has led to the authority admitting it is facing its ‘most difficult financial position’ in over a decade.

But despite being identified as a ‘council under pressure’ by the Unison union report, WCC chiefs said they remained confident the authority could ‘navigate its way through the current situation to a brighter future.’

Warwickshire faces a funding gap of £18.1million for the 2024/25 financial year- the third highest in the West Midlands.

A WCC spokesperson said councillors and officers were braced for a difficult time but backed the authority’s track record of ‘prudent financial management.’

The spokesperson added: “Across the country, local authorities are facing significant financial challenges.

“Here in Warwickshire, we face many of the same root causes, with increases for example, in demand and costs across social care, education and home-to-school transport.

“Demand for services, inflation, market capacity and an increasing growth in the gap between spending needed on key services and funding have all combined.

“Following the budget forecast, the council has taken swift action to mitigate against overspending and has set out a financial recovery plan detailing how it will balance the books.”

Warwick District Council faces a black hole of more than £4.3million from next April, as highlighted in its medium-term financial plan.

A council spokesperson said its pland to address the gap and deliver a balanced budget over the next two years would be outlined as part of its next budget report due in February.

Neighbouring Stratford District Council faces a far smaller deficit of just under £500,000. The authority said it currently held sufficient reserves to cover such a funding gap in the short term.

Unison gathered its data through Freedom of Information requests and from plans or papers from budget-setting meetings for those which did not respond.

Union bosses called on Chancellor Jeremy Hunt to provide extra grant funding in the autumn statement before authorities across the West Midlands were ‘no longer able to cope.’

The Department for Levelling Up, Housing and Communities dismissed the union’s figures, claiming they did not take into account local authorities’ reserves, which rose ‘significantly’ over the pandemic.

A spokesperson said: “We stand ready to speak to any council that has concerns about its ability to manage its finances or faces pressures it has not planned for.”

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