Strained council finances facing £40m overspend

Plus: Mersey Monitor ‘really good’ says council leader

by Lisa Rand

Liverpool Council is facing an overspend of around £40m this year, with the local authority expected to draw on reserves to balance the books.

Financial reports brought before cabinet at Liverpool town hall yesterday set out a difficult financial picture for the council, including rising demand for services and what officers described as a ‘very low level of useable reserves.’

During the May 5 meeting, members of the cabinet were asked by the Mersey Monitor to what extent they consider current government funding plans enough to deal with the pressures facing the local authority.

The question prompted an apparent compliment for the publication from council leader Liam Robinson, who described the Monitor as ‘a really good blog’.

Robinson pointed to what he described as the largest funding settlement in 15 years from central government. He also said around £80m had been budgeted this year for demand-led services, such as social care and homelessness, with costs expected to rise by more than £184m over the next few years.

Robinson also pointed to an ‘ambitious transformation programme’ aimed at changing how services are run, alongside continued investment in frontline services such as bin collections and parks.

He said £20m had been set aside to top up depleted reserves. Changes to government funding meant Liverpool would receive around £186m more than it would have done without the changes, he added, stating that the council would ‘continue to work with the government’ over funding.

The report, however, tells a more challenging story. It states how the overspend is largely down to rising demand for services and savings not being delivered in full, adding the council is running on very low levels of reserves.

This will reduce ‘the ability of the council to manage its financial risks in the future’ the report notes, and while £20m is due to be added back into the reserves in future budget plans, that does not appear to fully replace what is being used.

The report also points to additional pressures beyond the council’s control, stating the authority is ‘closely monitoring the ongoing impact of the conflict in the Middle-East’, with higher inflation expected to affect future finances.

While overall funding is increasing, most of that growth is expected to come from council tax rather than central government grants, according to the report. This reality is ‘particularly challenging for councils with low taxbases such as Liverpool, where there is a greater reliance on government grant funding and less ability to raise funding locally’ it adds.

Later in the meeting, cabinet member for finance Ruth Bennett also spoke of measures aimed at bringing more income into the council. These included efforts to recover more council tax and rates from Liverpool residents and businesses, resulting in nearly £40m extra cash collected last year.

before you go ….

While the Monitor may look on the face of it a mere one-woman band or ‘a really good blog’ as Liam Robinson put it, that would possibly be to forget the immense contributions of a small gaggle of cats as well as those more human helping behind the scenes, for which we are all very grateful.

Whether you’d like to get involved, have ideas for stories we should be looking at, or just by taking the time to read, we’d love you to be a part of what we’re doing here.

You can email us in confidence at themerseymonitor@outlook.com or call 07442 402 023.

If you’d like to make a donation, we’d be very grateful for your support. You can do that by clicking here: https://www.merseymonitor.com/#/portal/support

We also hope you enjoy today’s picture, taken in the lobby of the town hall before yesterday’s cabinet meeting. A moment of highly ornate glamour amidst all the grit.