Wakefield Council Leader sets out responsible approach to budget challenge
Monday, October 07, 2024
Wakefield Council has published an updated financial forecast showing a budget gap of around £88 million over the next five years.
“Strong financial management has helped us navigate over a decade of austerity. But this latest report shows starkly that the tough decisions are not over yet.
“Like every Council in the country, we face big financial challenges. The impact of inflation, growing demand for frontline services, and increased costs to borrow money. And that’s all come after years of chronic underfunding from the previous Government.
“Our responsible financial management and the difficult choices we’ve made means the Council is still here for everyone who relies on us. But that’s under threat.
“We can’t keep using reserves to plug gaps – it’s unsustainable. We’ll make the tough choices required to set us up for long-term success.”
Cllr Denise Jeffery
Leader of Wakefield Council
More vulnerable residents than ever before are needing support from the Council’s adults and children’s social care services. These are statutory services which must legally be provided regardless of the budget position.
Almost half the Council’s budget is already spent on adult social care. And the number of children needing complex care and support is at its highest ever level.
The economic climate is also affecting Council finances. Inflation continues to increase the cost of providing many local services. Higher interest rates are affecting the costs of servicing debt, including money borrowed for the Council’s Capital Programme.
“Nearly 14 years of crippling underfunding, significantly damages our ability to deal with the other financial pressures we now face. High inflation means that the current debt on our Capital Programme now far exceeds the budget we’d originally set aside to pay for it.
“That’s why we are taking the tough but responsible steps to scale back where we can. Looking at ways to cut our costs. Reducing our debt levels. And exploring ways to bring in more money through income generation.
“A sustainable future depends on us making these tough decisions now. It will affect some of the services we provide and some of the projects we had planned. Some will reduce, and some will stop.
“But we are determined to do our best for local people and will remain focussed on delivering the key priorities that matter most to our communities.”
Cllr Jack Hemingway
Deputy Leader of Wakefield Council
The next Local Government Finance Settlement – which confirms to local Councils how much money they will receive from Government – is expected in December.
The previous Government made it difficult for Councils to plan ahead. They awarded a series of single year settlements, and gave short notice of the amount of funding being allocated.
Cllr Jeffery added: “I know that the new Government is fully aware of the impact that this financial uncertainty has for Councils.
“They’ve been left a hugely challenging legacy. But as they get to grips with the country’s finances, I’m reassured that this is one of the areas they’ll be looking at.
“Having a properly funded Council providing great services is at the heart of any thriving local community.”
The Council’s Cabinet will discuss the financial forecast at a meeting on 15 October at 10.30am. The meeting can be watched live or later on the Council’s website.
The Medium-Term Financial Strategy also sets out the timeline for delivering a balanced budget for the coming financial year. At this stage it forecasts a potential budget gap of £35.8 million for 2025-26. The initial proposals setting out how this gap could be met, will be presented to Cabinet in two phases. The first phase is expected to go to Cabinet later this year and the second phase, which will present all the initial proposals to balance the budget, will be discussed at a meeting on 21 January 2025.
If Cabinet accepts these proposals, they will go out for residents and businesses to have their say. Once this consultation has finished, feedback will be reviewed, and the proposals worked through in more detail.
After going back to Cabinet on 18 February, the final 2025-26 Revenue Budget, Council Tax and Capital Programme goes to full Council for approval on 3 March 2025.