Difficult decisions regarding council services are “inevitable” as St Helens Council faces “great challenge and uncertainty”, a senior officer has warned.
Cath Fogarty, the council’s strategic director of corporate services, has painted a future engulfed in uncertainty, writing in the local authority’s statement of accounts 2018-19.
Ms Fogarty warned that the council can no longer afford to deliver all the discretionary services that has “traditionally” been provided.
By law local authorities in England have to provide certain services, such as waste collection and disposal, local planning functions and adult social care.
However, a number of other services are not mandatory, and it is these discretionary services that have seen the biggest impact from shrinking council budgets in recent years.
“The council’s current operational environment continues to be one of great challenge and uncertainty,” Ms Fogarty said.
“Since the comprehensive spending review of 2010, ongoing cuts in government funding have resulted in significantly reduced budgets.
“St Helens has been disproportionately affected seeing relative annual grant reductions far higher than many more affluent areas and by 2020 over a period of ten years the council will have lost £90 million of central government funding.”
The 2019 financial settlement for 2019-20 confirmed a £5 million reduction in the revenue support grant, one of its main sources of funding, resulting in a council savings requirement of £6.2 million over the coming year.
Ms Fogarty said: “This further reduction in resources will continue to significantly impact on the council’s ability to deliver its essential statutory duties and the discretionary services most valued by residents, particularly at a time of burgeoning service demand, cost pressures and raised expectations.”
Beyond 2020, Ms Fogarty said the unpredictability of the impact of future government policy in key areas brings “enormous” financial risk.
She added that this challenging position is heightened by the growing demand pressure on already strained local care services for children and adults and the unknown economic impact of Brexit.
Ms Fogarty said the “huge” financial losses to central government funding could be offset by increasing the local authority’s council tax base.
Pursuing “prudent commercial investment” will also be on the agenda going forward, she said.
“Growth in the local economy remains essential to increasing local prosperity and the employment prospects of residents,” Ms Fogarty said.
“Equally, if the council is to grow its tax base and revenue to compensate for the huge financial losses in central government funding, then furthering economic growth within the borough and the pursuit of prudent commercial investment remain critical to ensuring the sustainability of vital local services.
“The council, together with the St Helens Economy Board, will continue to develop and deliver a growth strategy that will seek to promote the borough, attract new business, and reinvigorate the town centre and district centres across St Helens.”
Ms Fogarty said that in 2018-2019 the council continued to effectively implement a clear budget strategy, resulting in a balanced budget and the delivery of required savings targets.
This is in the face of further reductions in government funding and growing demand for services and increasing costs.
Despite this, Ms Fogarty said it has “never been clearer” that it cannot deliver all of the discretionary services if wan to deliver a balanced budget.
Ms Fogarty said: “Sound financial management over a sustained period has, to date, largely allowed the council to minimise the impact of government funding reductions on front line services, whilst affording the council the ability to invest in the delivery of its strategic priorities.
“However, with a further £6.2 million of savings to be delivered over the coming year and the financial uncertainty councils face beyond 2020, it has never been clearer that if we are to operate within our resources and deliver a balanced budget, we can no longer afford to deliver all the discretionary services that have traditionally been provided.
“Further difficult decisions are inevitable, but our future budget planning must be decided based on identified council priorities, focusing on the protection of our most vulnerable residents and the delivery of our legal duties.
“Our aim is to establish a long-term sustainable budget that will allow us to effectively meet the ongoing needs of the community and if we are to do so we must continue to look to make the most of the opportunities before us; furthering economic growth within the borough, pursuing prudent commercial investment and prioritising the greater integration of health and care services to manage cost and demand pressures.”
The council’s audit and financial monitoring overview and scrutiny panel will be asked to scrutinise and note the statement of accounts 2018-19 next Wednesday.