Council savings target under threat

Wigan Town Hall

Wigan Town Hall

Town hall chiefs have delivered a stark warning about the risks they face in achieving their ambitious £60m savings target.

A report warns there are a number of threats to the four-year scheme, including Brexit, demographic pressures and a fall in business rates.

Without the transformation it is highly likely that the council would not be able to deliver its services as the level of budget would not be sufficient

The report

The report, penned by deputy chief executive Paul McKevitt, states: “The transformation of the council is paramount to the delivery of the required level of efficiencies.

“Without the transformation it is highly likely that the council would not be able to deliver its services as the level of budget would not be sufficient. Therefore the longer term financial viability of the council would be at risk.”

The Deal for the Future was unveiled as the second part of Wigan Council’s ambitious plans to save hundreds of millions of pounds in taxpayers’ cash as they seek to continue delivering its high level services while coping with the financial burdens of ongoing austerity.

And while the plan to save the £60m was laid out earlier this year, council chiefs have now set out further details of how they intend to achieve the saving, while also going into details about the associated risks.

Mr McKevitt’s report states: “Given the level of uncertainty following the vote to leave the EU and the resultant change of Prime Minister, the future financial climate for Local Government remains unsettled.

“It is essential therefore that robust financial planning is at the heart of the council’s strategy and incorporates both revenue and capital financial plans.

“The Deal for the Future has been developed as the council’s strategy to ultimately transform the council and in doing so deliver the required level of efficiencies.”

Since the start of financial austerity five years ago, Wigan Council has already saved £100m.

And the report also highlights the staggering gulf between the projected council budget had austerity cuts not been in place and the provisional budget for 2019-20.

Had austerity not happened, the council believes its budget would today stand at £382m. Its provisional budget for 2019-20 stands at £221m.

The report goes on: “To forecast the council’s financial position for the following four years is extremely difficult as there is great uncertainty on the future funding of Local Government.

“There are numerous risks many of which are difficult to quantify at this stage.

“It is anticipated that there will be some clarity provided in the Government’s autumn statement but there will still be ambiguity in key areas.”

The keys risk identified including demographic pressures, proposed increases to the National Living Wage and a fall in business rates.

The report goes on: “Business rates continues to be a major concern as the level of appeals lodged and successful each year has not diminished.

“Since 2013 the council has seen a loss of £7m on the total rateable value of businesses within the borough.

“If business rate growth is not achieved then it becomes likely that the shortfall on business rates will need to be met by additional efficiencies savings as ultimately the shortfall is not tenable in the long term

“There are sufficient funds set aside for the next couple of years to meet any potential shortfall but this cannot be maintained indefinitely.”

Mr McKevitt does highlight a pilot business rate scheme which Wigan Council will take part in which could allow them to retain all of its business rates.

However, the report also cautions that “it is anticipated that other grants would be reduced accordingly to neutralise this potential

benefit”.

The report also highlights the ways the council plans will make its savings.