Wirral Council told to make urgent changes to finances and governance
A report which looks in at how Wirral Council has performed over the year 2024-25 – known as the Auditor’s Annual Report (AAR) – has been published. This report, carried out independently of the council, also contains recommendations on what the council can do to improve in the future.
The full report can be read here, and below is an overview of some of the key points:
What is the Auditor's Annual Report?
All councils are required to publish their accounts (a summary of its income and expenditure for the year) and ensure that these are independently audited – examined – every year. These external audit reports give an overall summary of their Value for Money assessment of the council’s arrangements. They look at the council’s financial sustainability, assessing its level of strength or fragility, and identifying where there are serious risks that need attention. It also looks at the governance arrangements of the council – how it is run and managed and how well officers (council employees) and councillors (those elected by the public) work together, and at how the council is doing on “improving economy, efficiency and effectiveness”.
The report is not a review of quality of the services delivered by the authority, or policy choices made, nor is it intended to present solutions for addressing the council’s budget gap.
Who prepares the report?
Grant Thornton, is the appointed external auditor. You can find out more about this organisation here: About Grant Thornton | Grant Thornton
Why is the Auditor's Annual Report done?
The reports assess how the council is operating and offer advice on areas where it can work better. The auditors are required to provide an opinion on the council’s financial statements and whether they give a true and fair view of the financial position as well as assess whether the authority has in place arrangements for ensuring it maximises economy, efficiency and effectiveness in its use of resources - Value for Money. The aim is to ensure council tax payers receive assurance the council is being properly run.
How do they make sure the council listens?
This is done through recommendations, the importance of which depend on what the auditors find. These can be a:
- Statutory Recommendation – which means a significant weakness has been identified and the council must respond to publicly.
- Key Recommendations are when there is a significant weakness which the council should address and produce a response that is reported in the AAR, and
- Improvement Recommendations in which no significant weakness is identified but a change could enable better functioning of the authority.
What does it say about the council this time?
On financial sustainability the auditors have made three statutory recommendations plus two key recommendations. These relate to the auditors identifying “significant weaknesses” in the council’s financial sustainability, the pace of transformational activity, regeneration risks, the level of deficit in the Dedicated Schools Grant (DSG), and strategic planning.
Regarding governance – how the council is run – the auditors made recommendations regarding elected member/officer relationships, business cases for regeneration projects are developed, regeneration leadership capacity and senior officer recruitment practices. A further statutory recommendation and three key recommendations raised.
Considering how the council improves economy, efficiency and effectiveness the auditors made five key recommendations and one improvement recommendation after making recommendations to improve areas such how major projects are managed and procurement and contract management. It also endorsed the findings from the recent independent review of Wirral Council’s regeneration projects.
Does the council agree with the auditors’ findings?
The council has developed a number of actions in response to the recommendation and recognises the progress it has made to date implementing improvements. This report was looking at the 2024/25 financial year and significant work has already been underway with progress made during 2025/26 on some of the issues identified.
Is this report related to the council’s budget?
The auditors have identified significant weaknesses in the council’s arrangements to make sure it is financially secure in future years. They say Wirral Council “is facing stark financial challenges” and needs to act now to make sure it can set and keep to a balanced budget.
What recommendations does the AAR report make?
They are very clear that the council must swiftly put in place effective measures to control persistent overspending and fundamentally address historically low levels of reserves so it is prepared should an unexpected financial issue occur. The auditors also say the council should speed up the organisational transformation/restructuring to ensure the council can continue to operate within its financial means in the future.
What is the council’s response to the auditors’ report?
Chief Executive (Interim) of Wirral Council, Matt Bennett, said:
This auditor’s report highlights the continuing challenges that the Council faces and makes a significant number of recommendations that we will be implementing to strengthen the financial controls and governance arrangements in place”..
The Council recognises the scale of the financial challenges that it faces and the requirement for transformational change in the way that it delivers services to ensure its long term financial sustainability.
The council’s senior management and political leaders will be working together to deliver the transformational change which must be sufficiently ambitious to meet the scale of the challenges now before the council.
Many of the issues the council faces are interlinked and require a whole organisation approach otherwise they will not be properly addressed and it is vital we work across the council to deliver lasting change and improvement.
Work has already commenced to implement the recommendations , including appointment of a new Director of Transformation (Interim). This is a vital role which will increase capacity and leadership for our transformation programme, implementing changes across the whole organisation, as the council moves towards a new operating model.
The coming months will be difficult and we cannot underestimate the challenges we face but together we will make this an organisation which delivers the vital services the people of Wirral want and expect efficiently and effectively.
What happens next?
The report will now be considered by Wirral Council’s Audit and Risk Management Committee which meets on Thursday, 19 February at 6pm in Wallasey Town Hall.
