St Helens Council puts freeze on all non-essential spending due to financial pressures

St Helens Councils cabinet has approved a series of measures to try and mitigate its current financial position
St Helens Councils cabinet has approved a series of measures to try and mitigate its current financial position

St Helens Council has put a freeze on all non-essential spending and has put all vacant posts under review due to increasing financial pressures.


The council’s cabinet has approved a series of measures to try and mitigate its current financial position, with the councillor in charge of finance saying “hard times drive hard decisions”.

The council’s struggles are outlined in the latest financial monitoring report, which was presented to cabinet last week.

According to the report, there is a current variance against the council’s budget of £8.68m, an increase of £784,000 since the last financial monitoring report was presented to cabinet in November 2019.

Coun Martin Bond, cabinet member for finance, said the overall sum is mitigated by council-wide variations amounting to £1.64m, meaning there is a net projected variance of £7.04m.

The finance chief told councillors that almost every department within the council shows a variance and said it would be “significantly worse” without the use of earmarked balances of £9.1m.

Of that sum, £8.1m is being utilised to fund demand pressures in relation to children and young people in care.

Coun Bond said some of that money is also being used to fund “emerging priority actions” required to improve and maintain children’s services.

“The use of such balances is not sustainable year on year,” Coun Bond warned.

“The current expenditure takes up a significant element of the earmarked balances.

“That is not, as I have stated, a sustainable position.

“The formal budget strategy for 2020-2021 is being prepared in light of this issue.”

Coun Bond said the overall picture means the council’s projected general balances will be £7.4m by the end of March 2020.

He said “swift action” is being taken to address the in-year budget position.

To reduce the impact of these budget pressures on the council’s general fund balance, proposals were put forward to approve a review of all currently vacant posts.

Councillors were also asked to approve a freeze on all non-essential expenditure.

Coun Bond said: “The report continues to show the direction of travel from previous ones in the year.

“Action is being taken to mitigate the position. Ultimately, hard times drive hard decisions.”

The costs associated with looked-after children continue to cause significant financial pressures for the council.

The projected budget pressure in respect of this has increased by £411,000 due to increases in the number of children brought into the council’s care.

At the end of October 31, 2019, there were 534 children in the care of the local authority, a rise from the 520 reported at the end of September.

The financial monitoring report also outlines the struggles the authority has made with achieving its savings plans.

The original revenue budget outlined service savings totalling £6.2m to be delivered by the end of the current financial year but around half of those currently present a financial risk to the council.

And in October, Coun Bond ordered cabinet members to develop new, detailed portfolio budget options to close the forecast budget gap of £5.4m for 2020-2021.

Coun Bond said the non-achievement of savings or identification of alternative proposals has contributed to the portfolio budget pressures.

St Helens Council leader David Baines said the current funding arrangement for local authorities continues to be “unsustainable”.

He said the steps taken to address the growing financial pressures are “responsible measures” but not ones the councillors want to take.

Coun Baines said: “This report shows yet again that local government continues to be asked to do more and more with less and less.

“These are statutory services that are being underfunded by central government. The steps we’re taking today include a freeze on non-essential expenditure and a review of current vacancies.

“And they are responsible measures that we have to take but they’re not measures we want to take.

“The local government funding situation in general has been for some time and continues to be unsustainable and we continue to call on government to take urgent action to help us to provide these essential services that our communities and our residents deserve and demand.”

Cabinet approved all of the recommendations in the financial monitoring report.