Budget black hole at Wirral Council predicted to be £100m

Nov 2 2011 by Liam Murphy, Birkenhead News

THE budget black hole at Wirral Council is now predicted to be about £100m – a massive increase on previous estimates.

It follows the loss of 1,100 jobs in the past year as officials made £33m of cuts – and further raises the possibility of more redundancies to come.

The latest forecast, revealed last week, predicted the council will have to find ways of saving £22.6m, £30.8m and £46.9m in each financial year between 2012 and 2015.

That is an increase from an estimated budget deficit of £85m during the same period, which was reported to the council’s cabinet recently.

In a report to councillors, finance director Ian Coleman said: “As part of the local government resource review, the Government proposes to reduce specific grants from 2013.

“The impact for Wirral could be a loss of £7m in 2013-14 and £23m in 2014-15.”

The council is also bracing itself for Government proposals to review how business rates are redistributed.

Wirral currently receives around £130m – more than twice the £60m it contributes – and changes could affect its budget deficit further.

The council is also expecting a marked reduction in grants as a result of a drop in population.

As it moves towards setting a budget for next year, the ruling Labour group has reintroduced more generous voluntary severance and early retirement allowances in what leader Steve Foulkes said “will avoid the need for compulsory redundancies”.

The past year’s redundancies were part of the bid to deal with a budget deficit of £33m.

Cllr Foulkes said: “We do not expect there to be people leaving in anything like the previous numbers, but we may need some to leave depending on what comes out of the consultation.

“We have always had a policy of avoiding compulsory redundancy and I believe that would be more likely to happen with a more generous settlement.”