Budget update – Policy & Resources Committee, February 2025

Budget plans for 2025-26 are to be considered by Wirral councillors at a meeting of the authority’s Policy and Resources Committee on Wednesday February 19 at Wallasey Town Hall.

Like many other councils across the country Wirral Council has faced severe financial challenges up to and throughout the current year (2024-25). The most recent forecast of a £19.5m overspend suggests that a balanced position will not be achievable without assistance from the Government.

Measures to restrain spending and make cost savings had quickly been put in place early in the financial year when forecasts indicated a significant overspend was likely, but even these measures were not sufficient to contain expenditure to the degree required. As a result, an application has been submitted for Exceptional Financial Support (EFS) to the Ministry of Housing, Communities & Local Government (MHCLG).

This application seeks assistance in balancing the current year’s budget, with an additional EFS application having been submitted for 2025/26 to ensure the Council has sufficient resources to fund the proposed one-off transformational costs required to deliver budget savings being put forward, as well as to help manage the ongoing increasing demand for social care costs.

Meanwhile all Council departments were told to seek significant savings and bring forward savings proposals. Recent weeks have since seen a range of these budget savings options considered by Elected Members, through the Council’s committees, to identify ways to manage the financial challenges facing the authority. 

To meet the challenge of ensuring the Council can operate within its means for 2025-26 and beyond, while ensuring the Council is able to continue protecting the most vulnerable in our communities, the budget for the coming year identifies total savings and efficiencies of £25.446m.

This includes:

• Delivering previously identified savings amounting to £9.779m
• Council business efficiencies of £4.680m, this will identify efficiency measures that will result in more effective ways in which services are currently provided and may include cost reduction
• Increasing income to bring in an additional £0.502m, the Council will look to identify areas where it can raise income through fees and charges 
• Changing how the council funds and provides services will save £8.532m, the aim is to ensure that the right service reaches the right resident when and where they need it, for the best cost. This may mean changing how we fund or provide services so that we are able to reduce costs and maintain services by becoming more efficient and by doing things differently, and
• Reducing or stopping some services will see savings of £1.953m, all efforts will be made to keep service reduction to a minimum, however the scale of the financial challenge means that not all reduction proposals can be avoided.

A full list of the budget proposals to set a balanced budget for 2025/26 is in Appendix 1 of the 2025/26 Budget and Medium-term Financial Strategy, item 6 of the agenda to be considered by the Policy and Resources Committee. 

Final decisions on the budget, including the savings options, will be made by Full Council in March.

The proposed budget would also set the Band D Council Tax at £1,982.44 for the Wirral Borough Council element of the Council Tax bill, representing a general increase of 2.99% and 2.00% ringfenced increase to Adult Social Care, subject to Full Council approval.

The Council’s financial position reflects that of many other authorities across the country. At a meeting on 26 February 2024, the Council had agreed a budget for 2024/2025 of £399.6m to be met by government grants, council tax, and business rates but it soon became clear the authority was facing a significant overspend largely driven by increased costs of, and demand for, social care.

This point was also acknowledged following the Council’s recent published Annual Audit Report for the year in which the external auditor issued a Statutory Recommendation and said that the Council faces “an extremely challenging financial situation with significant financial pressures creating budget overspends combined with low levels of reserves”. 

Adult Care & Health forecast is expected to see an overspend of £7.810m against the anticipated budget, the main pressures within the directorate being in relation to the cost of care budgets. In addition, Children, Families & Education an overspend of £9.657m, with significant pressures from costs of children in residential placements and home to school transport.

Other factors in the council budget include Finance and Neighbourhoods Services directorates which forecast overspend of £3.221m and £2.331m respectively.