Audit reveals 'stark' financial challenges faced by St Helens Council

St Helens town hall
St Helens town hall

Work carried out by an external auditor highlights the “stark” challenges St Helens Council faces in the future, the leader of the council has said.

Grant Thornton issued their Annual Audit Letter in August and this week it went before the council’s audit and governance committee.

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As previously reported, the external auditor gave an unqualified opinion on the council’s financial statements, which means they are a true and fair view of the authority’s financial position.

Grant Thornton also gave an unqualified value for money conclusion, which means it is satisfied that in all significant respects the council put in place proper arrangements to secure economy, efficiency and effectiveness in its use of resources for the year ending March 31, 2019.

However, the external auditor highlighted some significant challenges faced by the council.

In 2018-19, the council overspent its budget by £1.864m due to a number of spending pressures, particularly in respect of looked after children and leaving care services for younger people (£3.8m) and learning disability support services for adults (£1.1m).

Subsequently, the council’s general fund reserves have decreased from £21.3m to £17.8m.

On Monday, St Helens Council leader David Baines warned the council is not being given the resources from central government to fund these vital services.

“The value for money conclusion sets out quite starkly in black and white the financial sustainability challenge the council faces as an authority,” Coun Baines said.

“We get accused as politicians from all parties of using these figures and austerity and cuts and all sorts of things for political gain from time to time, which of course we’d never do.

“But this report from Grant Thornton really sets out in black and white the challenges that we do face.

“We had an overspend last year for the first time in a very, very long time, certainly in my memory, overspending on our budget of £1.864m in ’18-19 due to spending pressures in children looked after and leaving care services for younger people and learning disability support services for adults.

“These are vital services for vulnerable residents that we’ve got no choice but to deliver as responsible corporate parents and responsible people and we’re not being given the resources needed to properly fund them.”

A three-year budget was set in March 2017 that required the council to deliver £20.6m savings over three years through to 2019-20.

The 2019-20 budget requires delivery of £6.2m savings. However, forecasts show more than 50 per cent is at risk of delivery.

Despite this, the external auditor was satisfied appropriate measures are in place.

“Although the council overspent in 2018-19, there are sound budget reporting arrangements in place to identify this and take action to monitor and reduce the forecast overspend,” the Annual Audit Letter said.

“Therefore we concluded that appropriate arrangements are in place.”