Council makes savings but funding gap remains a challenge
News release issued:
The projected funding gap Wyre Forest District Council is facing looks set to be around £2.7million by 2024. This is despite the authority making savings of more than £1 million in the last financial year.
A report setting out the council’s final accounts for 2020-21 shows savings of £1.074 million from an overall net budget of £14million.
The financial gap is due to changes in the way local councils are funded by Central Government. The report highlights that, despite Government funding towards the extra costs and providing some compensation for reduced income, the COVID-19 pandemic has made the financial situation worse.
Savings in the past financial year have come from across all service areas and there has been increased income from planning, land charges and building control. There was also additional funding of £98,000 from the Government to help fund Council Tax losses. But due to the impact of Covid and a change in the way funding is distributed, the amount of income the council received from Business Rates was down by more than £0.5 million. The council has assigned some of the savings to provide reserves to mitigate risks for future major projects.
Councillor Mary Rayner, Wyre Forest District Council’s Cabinet Member for Finance and Capital Portfolio said:
“To make this amount of savings given the current financial landscape is a fantastic achievement. Credit should be given to staff across the council who continue to adapt and find new ways of working to reduce expenditure. We are pushing ahead with the transformation programme, exploring more shared services and have a very strong reputation for financial management.
“But these remain increasingly challenging times. The effect of the pandemic is still being felt. While we have welcomed the Government’s additional grants, they have not covered the full financial burden on the council. It is extremely difficult to forecast the full extent of the impact on council finances but we have been able to balance our expenditure and income in the last financial year with just a small increase in the planned use of reserves. We have a major challenge ahead to close our projected funding gap.”