Council warns of severe financial difficulties despite achieving savings
News release issued:
Wyre Forest District Council achieved savings of more than £1 million during the last financial year. The council has done this by careful budget management, including both cost savings and one-off increased funding. But the authority is warning it’s still facing severe financial difficulties which have been significantly exacerbated by the Covid-19 pandemic.
A report setting out the authority’s final accounts for 2019-20 shows savings of £1.065 million from an overall net budget of £11.6 million.
Savings have come from across all service areas including a restructure of senior management and amounted to more than £410,000. There was also additional income due to a one-off increase in funding from business rates and a £50k Government support grant for the Council towards its response to the Covid-19 pandemic.
The Council must continue to find savings in order to address a funding gap in 2022-23 of around £1.7m. The gap is due to changes in the way local councils are funded by Central Government. The Council’s plans were set out in a three-year financial strategy which was adopted earlier this year before the Coronavirus outbreak. The impact of the pandemic is on-going and not reflected in the financial statement.
Leader of the Council and Cabinet Member for Strategy and Finance Councillor Graham Ballinger said,
“The 2019-2020 financial year proved a challenging but successful year in terms of the Council’s finances and performance. This reports highlighting savings shows how the Council is maintaining its reputation for strong financial management.
“We know we cannot be complacent as we have a major challenge ahead to close our projected funding gap and at the same time respond to Covid-19. The current pandemic is placing unprecedented stress on our budget in the short term. We are seeing the reduction in, or in some cases even complete failure of, some of our income streams for at least part of 2020-21. Together with cost pressures in services such as homelessness and cash flow implications, this will mean we will have to take action to safeguard the Council’s budget in the medium term. While the Government’s additional grant announcements are welcome, they are not likely to cover the full financial impact on the Council, the extent of which is difficult to predict accurately.
“It is important that we continue to be candid with the public about the position and the potential implications if the Government’s support for councils at this time leaves a significant gap. The inevitable consequence would be that we would have to fund that gap from reserves and that action to bring our expenditure and income into balance would have to be accelerated after the COVID-19 outbreak is over. These Final Accounts savings are extremely welcome and will help buffer the losses we have suffered.”