Senior Labour councillors have been asked to develop savings plans to claw back a projected £5.4m budget gap for St Helens Council.
The council’s 2019-2020 budget was the final year of a multi-year budget settlement from central government, which resulted in a need for £20.6m of savings to be found over the three years.
After months of uncertainty, Chancellor Sajid Javid announced in August a one-year funding settlement for 2020-2021 instead of the usual three-year spending review.
The Chancellor said a one-year spending round completed in September would give government the “time and space” to focus on delivering Brexit.
In light of this, St Helens Council’s cabinet agreed this week to set a one-year budget for 2020-2021.
Additionally, councillors were asked to develop detailed portfolio budget options to close the forecast budget gap of £5.4m for 2020-2021.
Coun Martin Bond, cabinet member for finance, said that, without the use of one-off funding, the budget gap would be £10.3m.
“This differential will be an issue that needs addressing in the budget for 2021-2022,” Coun Bond said.
“Any further worsening of the 2019-2020 position will add to the extent of the savings that need to be found in order to set a balanced budget for 2020-2021.
“Detailed portfolio budget savings options need to be developed to allow the forecast gaps to be addressed.”
The finance chief added that the process will need to involve “collective prioritisation” of these savings options.
Coun Bond said: “In developing the budget savings options, consideration needs to be given to the instances where reductions in specific sources of funding had been expected, which will now not materialise and where inflationary increases have been announced that were not previously anticipated.
“It is proposed that a one-year budget is set for 2020-2021, whilst the ongoing uncertainties caused by government delay still exists.
“But this needs to be with a recognition that without any expectation of significant levels of additional funding for future years, there will be continuing shortfalls between the resources available to the council and those that are necessary to deliver the proper level of services to residents.
“There is not enough resource in the system as it stands.
“Once some of the resources that Brexit is presently taking up are released, central government should move to address this deeply serious issue.”
Currently, there are a number of existing budget pressures, most notably in adult social care and children’s services, particularly in respect of looked-after children.
For 2019-20, the council saw £5m slashed from its revenue support grant, a lump sum that can be used to finance revenue expenditure on any service.
This takes the overall reduction of general support grant from the government to £90m since 2010.
Prior to the one-year spending review, it was anticipated that a significant number of changes would be made to local government funding that would impact the 2020-2021 budget.
These include the Fair Funding Review and the heavily delayed social care green paper, as well as a number of changes to the business rates system.
However, Coun Bond said none of these issues have been addressed by government due to it being tied up with Brexit.
Coun Bond said: “It’s appreciated that central government is grappling with the most significant issue in modern times, which understandably is consuming significant resource from the civil service.
“This means the Treasury is only giving local government a one-year settlement, which hampers its ability to plan into the medium-term. This sort of medium-term planning is helpful in targeting resources to deliver services.
“Whilst the black hole of Brexit sucks in government resources, at a local level our fellow residents are still falling ill, children are still requiring care and protection, day to day services run their normal course whilst many like children and adult’s deal with increasing demand with diminishing resources.
“£90 million rinsed out of the budget isn’t abstract – it’s real.”
St Helens Council leader David Baines said the uncertainty around future local government funding is causing a “huge amount of difficulties” for the authority.
Coun Baines added that the council will continue to protect the borough’s most vulnerable residents “to the best of our ability”.
“It would be one thing dealing with cuts if we knew what sort of cuts we were dealing with and what the forecast was, but we don’t know precisely what we’re expected to deliver and that’s what causes extra difficulties,” Cllr Baines said.
“We must protect our most vulnerable residents and we will continue to do so to the best of our ability, and we must provide as best we can the services that our wider communities and all residents expect and deserve.
“Working in new ways is part of that challenge but so too is getting the support we need from central government.
“Local council taxpayers and business rate payers here in St Helens cannot and should not be expected to continue to bear the burden of funding our essential services.
“And that’s the message we need to put out there to central government.”