Budget proposals to go to council’s Policy and Resources Committee
A balanced and legal budget which supports Wirral Council’s frontline services is set to be recommended to authority’s Policy and Resources (P&R) Committee when councillors meet on February 13.
An initial forecast, early in the process of setting a budget for 2024-25, estimated a shortfall of around £15 million.
However, building on the work of the previous year to reduce budget pressures, officers have identified significant transformational savings to assist in balancing the budget for 2024-25 and provide savings in the following years to allow long term planning and ensure Wirral Council becomes financially sustainable.
In addition, the council’s Medium Term Financial Plan (MTFP) – which is the Council’s key financial planning document covering a rolling five-year period; acting as a reference point for corporate decision-making and ensuring that each year’s budget is considered within the context of the Council’s ongoing sustainability over the entirety of the planning period – will continue to be updated and reported regularly to P&R Committee so pressures can be identified early and addressed.
Setting a balanced and legal budget is a key priority for the council. Following the authority seeking exceptional financial support in 2021 the Independent Assurance Panel was appointed as part of the council’s move towards putting itself on a sustainable financial footing.
In a recent letter to P&R, the Panel chair said they are now reassured the council “will be able to set a balanced budget for 2024/25” and that the gaps for the subsequent two years will be “manageable and that savings will be identified”. The Panel chair concluded that once the council has set a budget for 2024-25 the Panel anticipates it will be able to stand down.
Leader of the Council, Cllr Paul Stuart, will recommend that P&R agree to the proposed budget. He said:
The letter from the chair of the Independent Assurance Panel is a reassuring sign of the council's progress.
The Panel has oversight of the work which has taken place to put the authority on a sound financial footing and sees we are moving in the right direction. At a time when we are seeing councils across the country struggling to balance their budgets, this is a testament to the hard work of elected members and our officers.
Part of this is the work done to review how the council delivers for the people of Wirral and provides the best possible value for money. We have taken a detailed and honest look at how our whole organisation operates and are making sure it is efficient, effective and focused on what it needs to do. We aim to continue improving, providing the best services we can within our means, building on this efficiency and improving service delivery in the coming years.
Following presentation of the proposed budget to P&R, the budget will be presented to the full Council, which meets on February 26.
Along with the budget, a number of other financial reports will be presented to P&R in February. These include an update on the Council’s total outstanding debt – which comprises borrowing, PFI liabilities, leases and transferred debt from local government reorganisation – and is expected to rise from £400.3m in 2023/24 to £409.7m by 2024/25, before reducing to £401.3m by 2026/27.
In addition, the Treasury Management Strategy report, says the council has £51m of exposure to ‘Lender’s Option Borrower’s Option’ (LOBO) loans of which £36m of these can be called within 2023/24. During 2023, a number of LOBOs were called by the respective lenders. The Council took the opportunity to exit these loans at nil penalty and refinanced the borrowing requirement via PWLB loans. The amount restructured in this way was £23.5m. Following an analysis and negotiation, the Council chose to refinance a further four LOBOs, totalling £20m and replace the financing with PWLB borrowing. The anticipated saving from this negotiated package of refinancing is £0.5m.
Capital reports also outline a number of major capital projects being put forward for the period 2024 to 2029. These include the extension of the burial area and the modernisation of the chapel complex at Landican Cemetery and funding to support priorities around environmental improvements; this could include enhancements to parks and green spaces, investment in gully-cleaning machinery, improvement in our capability to monitor air quality and any other suitable investment in accordance with the council’s priorities and policies.
A report on council investments shows the current valuation for Europa Boulevard has fallen to £4.13m from £8.4m and Vue Cinema has dropped to £5.1m from £6.8m, while valuation of other investment properties has risen by £1m to £10.3m. Most of these assets are owned for historic reasons, but subsequent acquisitions - Europa Boulevard, Vue Cinema and The Pyramids and Grange Shopping Centre for example - are linked to regeneration opportunities and were not acquired specifically for income generation purposes.
Cllr Stuart said:
While there is still work to do to get the council's finances where we want, there is no doubt they are in a vastly improved position following the difficult work done to identify and achieve considerable savings in recent years.
Based on this, I hope if P&R and council agree to the budget plans, Wirral Council will be ready to look ahead to delivering for the people of the borough with confidence.
Policy and Resources Committee will meet at Birkenhead Town Hall on Tuesday February 13. The agenda will be published on the council website the week before where there is a link to also watch the meeting webcast.
Full council will meet at Birkenhead town hall on Monday February 26. Details of this meeting will also be available on the council website a week before.