Wirral Council Budget: FAQ

16 January 2025
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What is happening to Wirral Council’s budget?

Part way through the financial year 2024-25 it became clear the council is facing a major budget gap (reported to the authority’s Policy and Resources Committee on November 6).

The authority was, and remains, in a position in which it looks likely it will not be able to balance its budget without using up all its reserves. This means on current projections, by the end of the current financial year in March, the authority will be £20 million short of the amount it needs to balance its budget this year.

It also strongly indicates that if the council is £20 million short this year, then with demand for services continuing to rise and costs going up too, there will be even great difficulties in balancing the budget in 2025-26.

 

How did this happen?

Wirral Council, like other authorities across the country, has faced significantly increased demands for social care across both adults and children’s services, which account for a majority of the financial pressure being faced. 

The Adult Care & Health directorate forecasts a combined overspend of £8.857million which is partially offset by an extra £1.309m of income. The overspend comes from areas including Older People Services – £4.826 million – largely due to the increasing number of clients and additional complexity of needs. Similarly, demand for Elderly Mentally Infirm (EMI) services and Mental Health and Disability Services continue to rise. The Directorate has an action plan in place to address the issues.

Children, Families & Education forecast an overspend of £9.996 million with significant concerns over children in residential placements and home to school transport. Despite an overall reduction in the numbers of “children looked after” (CLA), there are still substantial pressures from the placement costs, with £7.054m of the forecast overspend for the year in relation to placements.

Other areas of overspend include Finance which forecasts a budget gap of £2.897million while Neighbourhoods Services forecast an adverse variance of £2.331million, across areas including income shortfall on car parking charges, highways maintenance costs and leisure services.

(The figures quoted are from the Q2 monitoring report. Updated Q3 figures will be available in the February P&R meeting.)

 

What is being done to solve the problem?

As a short term measure the council is working closely with Government (the Ministry for Housing, Communities and Local Government - MHCLG) to  request Exceptional Financial Support.

Since 2020, the government has agreed to provide a number of local authorities with support via the Exceptional Financial Support framework, following requests from these councils for assistance to manage financial pressures that they considered unmanageable.

 

Will the authority again be subject to an external assurance review?

No details have yet been confirmed by MHCLG, but there will undoubtedly be a requirement of some description that the authority is moving to a more sustainable financial footing.

 

How will the council be expected to pay it back?  

The repayment is usually over a period of up to 20 years, details to be agreed with Government.

 

What is being done to ensure this doesn’t happen again?

Budget Oversight Panels (BOPs) have been held in recent months to develop budget options across all council areas. This follows a spending freeze brought in part way through this current financial year. Councillors at P&R Committee (January 15) have also agreed to continue the spending freeze and recruitment controls, to limit expenditure to only absolute essential items and this will carry on into 2025/26 including minimising any other spending, where possible. In addition there will be a global offer to staff to request Early Voluntary Retirement (EVR) or Voluntary Severance (VS).

 The coming weeks will see council committees being asked to consider feedback and outcomes from the Budget Oversight Panels (BOPs) which have been held in recent months to develop budget options across all council areas.

Work is already underway on a number of measures to help tackle the budget gap including major transformation of the Council’s digital capability to modernise business processes and streamlining back-office functions. 

Council-owned land and buildings will be further reduced to deliver value for money and generate capital receipts while work is underway to manage demand for statutory services, while the Council’s leisure and cultural services offer will be modernised.

 

What happens next?

Through January there will be a series of meetings of council committees to consider budget options in their service areas, considering feedback and outcomes from the Budget Oversight Panels (BOPs) and then make recommendations to the Policy and Resources.

The P&R Committee will meet on February 12 to look at the options for future budget savings and the final decision will rest with the full council which will meet on February 26 - Budget Council – when a decision is due to be made on budget for 2025-26 (with the option for additional meeting if required).