Extra government cash 'just one per cent of budget', warns council leader
A Black Country council leader says he is confident his authority will avoid technical bankruptcy this year – but warns it will be a 'huge task' to prevent it in the years that follow.
Councillor Patrick Harley said he welcomed the extra £4.2 million that the Government had provided in its settlement for next year, but warned that it would have only a limited impact on the problems the council was facing.
"The extra funding is of course welcome, although it only represents one per cent of our budget," he said.
"However, all concerned are working hard to ensure we set a legal budget without the need to use ring-fenced reserves."
Last month it was revealed that the council was trying to plug a forecast deficit of £14.2 million in the council’s annual costs of £321 million with a 4.9 per cent rise in council tax and a new charge for collecting green waste.
Almost half the rise will be dedicated to paying for adult social care after costs rocketed causing an overspend of £7.7 million.
Council deputy chief executive Balvinder Heran warned that any further deterioration in the council's finances risked following Birmingham's example by triggering a report under Section 114 of the Local Government Finance Act – effectively declaring the council to be insolvent. Talks have already been held between the council's head of finance and central government on avoiding such action.
"I'm confident this year we will not enter 114 territory," said Councillor Harvey.
"That being said, we still have a huge task to ensure that position remains the same for 2025, 26 and 27. That will not be easy and will require a new operating model and at the end of this process we will see a very different council."
The settlement was welcomed by Dudley North MP Marco Longhi when it was announced earlier this week.
"Local authorities play a vital role in our communities, providing crucial local services that people rely on, but we know the effect of Covid and the war in Ukraine have increased cost pressures," he said.
"It is great news that Dudley will have a funding boost this year. These additional funds will help our local leaders take long-term decisions to deliver a brighter future for their areas."
