Desperate days loom as full extent of Wolverhampton cuts revealed

Politicians are now in a bitter war of words over who is to blame for a situation that has left the city council a year away from bankruptcy unless it massively reduces what it is spending.

Wolverhampton City Council's controlling Labour group says the authority will be 'insolvent' in 2015 unless it comes up with £123 million worth of cuts over five years.

Without major cuts over the next 12 months, it will be down to its last £620,000 by the end of the next financial year and bankrupt shortly after.

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Up to 1,400 jobs will go but even that will put an enormous burden on budgets.

Redundancy is expected to cost more than £18 million over two years.

As councillors now look for more services to cut back than the 165 savings they have already drawn up it has been revealed that:

• Care homes, home help and support for children in care will all have to cost less.

• Libraries in some parts of Wolverhampton will open just 15 hours a week.

• Central Baths will shut unless a way can be found for it to operate on its own without council funding.

• Labour blames the Coalition Government completely for the mess, saying it has lost 52 per cent of its grants.

• Tory and Liberal Democrat councillors say Labour was not managing the council’s finances well enough and must accept the blame.

Councillor Andrew Johnson, who is in charge of finance, said: "We have to bring forward £4 million worth of cuts, find another £5 million worth of savings proposals by the end of January then another £10m worth by the end of May.

"We are going to have to have a real hard look at the budget for adults and children's services.

"This means looking at everything from domiciliary care for the elderly to support for people with learning disabilities, residential facilities for children, fostering and looked after children."

He has suggested that the scale of the cuts in funding is so great that the council faces the very real possibility of not having enough money to empty the bins or to care for the elderly.

If the council cannot deliver a balanced budget, the government will come in and close services.

Meanwhile work is continuing to try to find a way for Central Baths to carry on without a £316,000 a year subsidy.

The 'disproportionate' cuts to Wolverhampton City Council's budget were today criticised by Labour MPs who rallied round to defend it.

But the city's Conservative MP Paul Uppal said the council had to take responsibility for its own handling of its money. The Labour controlled council says its funding has been cut by £147 million, or 52 per cent, since the Coalition Government came to power.

Emma Reynolds, Labour MP for Wolverhampton North East, today demanded an apology from the Prime Minister for remarks he made on a visit to the city last October.

He said at the time the city was receiving a 'smaller cut than the average'.

But the controlling Labour party claims government funding cuts will have stripped it of 52 per cent of the budget it had available in 2010, before David Cameron came to power.

Miss Reynolds said: "For the past three years, this government has consistently cut the council's grant, by some of the largest margins in the country. Nationwide, the government has cut its local government grant between 2010 and 2015 by 37 per cent, but in Wolverhampton the cut will be over 50 per cent.

"This means the council is now in a position where it will have to make large scale cuts that will be damaging to the services it provides to people in Wolverhampton."

"When the Prime Minister came to Wolverhampton in October, he claimed, referring to the council's spending cuts, that 'it's a smaller cut than the average'. It is obvious that this claim was highly misleading. Wealthier authorities like Oxfordshire County Council, have had to make much smaller cuts than Wolverhampton.

"David Cameron should apologise for his misleading claims. He will have to explain to people in Wolverhampton why he has made them pay the price for his failures to solve the cost of living crisis and deliver an economy that helps hard working Wulfrunians. While he cuts taxes for millionaires, the only cuts he has given to people in Wolverhampton are to essential public services."

And Pat McFadden, MP for Wolverhampton South East, said: "This is a direct result of the Government's decision to cut funding to the city council.

"Most of the council's funding comes from government grant and that proportion is being cut in half. This is changing the shape of what the city council can do for the people of Wolverhampton and will have an impact for many years to come."

Paul Uppal, Tory MP for Wolverhampton South West said: "The council has a debt of half a billion pounds which is costing £5,000 per household per year to service. It has to be able to live within its means and I feel that there has not been the necessary financial rigour over what the money is spent on."

He questioned plans for the council to spend around £15 million on a revamp of its Civic Centre headquarters.

The council has said the move will save it hundreds of thousands of pounds a year because it will be able to cut the number of buildings it operates in from 13 to two.

Liberal Democrat councillor and former Mayor of Wolverhampton Councillor Malcolm Gwinnett said the Labour party had squandered millions of pounds of reserves built up when his party and the Tories ran the council in a coalition.

The coalition group lost control in 2010 after two and a half years in power. Back then the council's reserves, which could be used in the case of unexpected needs, were £44m.

They are now £22m and will be down to £620,000 without major cuts.

He said: "I have been saying for a long time that we need to go back to basics.

"We need to run the council as a business, looking at the services that people need the most.

"That means focussing on the core issues like emptying the bins, fixing the streets, making the sure the lights are working, looking after the elderly and so on." Councillor Gwinnett said:

"It's painfully obvious that Labour did not get to grips with this early enough. They spent the reserves. They were left with £44 million when the Conservatives and Liberal Democrats lost control of the council to Labour in 2010.

"Now that's going to be down to £620,000 in a year without massive cuts." The leader of Wolverhampton City Council, Councillor Roger Lawrence, said the authority had been dealing with both cuts and demand for services.

He said: "The increase in looked after children is around 60 per cent.

"That has been exacerbated by welfare reforms.

"And at the same time our income from grants has been effectively halved." The council is planning to increase council tax by two per cent in April. It is the maximum the authority is allowed to raise the rates by following new rules brought in by the Government last year.

Any council tax rises above two per cent have to be put to the public vote in a referendum.