Kirklees Council’s budget gap for the next financial year has increased to £47.8m as its finance lead warns that there are “tough decisions to come” for the authority.
Last month, the council warned that it could face issuing a section 114 notice in 2024/25 if its expenditure was not minimised this financial year. At the time, Kirklees outlined that it faces a funding gap for 2024/25 of c£30m, which combined with the 2023/24 deficit, could require savings of £50m in the next financial year.
However, according to the latest council report, Kirklees has forecasted a renewed budget gap for 2024/25 of £47.8m, with this being the “most immediate issue” for the council. The authority also estimated a deficit on its medium-term financial plan of £57.9m by 2028/29.
“This is partly caused by the continuation of the overspend in 2023/24 as a result of the continuing impact of the cost of living on the council, shortfalls in income and rising demand pressures, particularly in children’s services,” the report stated.
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Savings delivery plan
The report outlined a financial plan which is intended to aid the council in achieving the savings required over the medium term. These measures include attracting further investment, cutting the cost of services by reducing management and administration costs as well as reviewing the scope of council services.
The report also detailed that Kirklees will need to review the delivery of its capital programme, meaning that the council may have to “delay, defer, stop or not start some projects”.
This is on top of action that the council enforced earlier this month, which included implementing strict controls on all expenditure, freezing recruitment further and re-assessing future investment plans.
Graham Turner, Kirklees’ cabinet member for finance and regeneration, said: “This financial plan shows we’re facing up to the challenge. Over the past few months, we’ve taken urgent action to address the immediate financial issues and this updated strategy will build on that work to safeguard the financial future of the council, which is key to delivering all our services.
“There are tough decisions to come. But we will continue to be open with residents and keep putting pressure on government to give Kirklees residents the fair deal on funding they deserve.”
The council’s cabinet discussed the new financial plan at a meeting on 6 September. At the meeting Julie Muscroft, Kirklees’ service director governance and commissioning, said that in the next month or so, officers will give the authority assurance as to whether the £47.8m of savings will be achievable.
Kirklees is ‘not alone’
The news that Kirklees’ financial challenges have increased comes as Birmingham City Council issued a section 114 notice on Tuesday (6 September) after reporting that it faced insurmountable financial pressures.
Prominent factors which led to the financial downturn of Birmingham include costs associated with equal pay claims, implementation issues with its IT system and a lack of government funding.
Kirklees Council outlined that since 2011, it has faced continuing funding reductions and increasing demand pressures far greater than more affluent areas with lower levels of relative needs, factors which have contributed to the council’s current financial position.
However, at the cabinet meeting Rachel Spencer-Henshall, strategic director corporate strategy, commissioning and public health, stated: “You will have seen the news today about Birmingham, so we are not alone in this position in terms of the challenges facing the sector, but none the less what is important is we are on the front foot and doing the best we can.”
Other councils which have also recently expressed financial concerns about balancing their budget include Suffolk, Cornwall, Stoke and Manchester.
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