The government could step in at Wirral Council if the cash-strapped local authority cannot balance its books.
Wirral Council currently faces a budget gap of more than £32m with council officers proposing a number of measures including raising Council Tax and sweeping cuts that could see 10 libraries close across the borough.
The budget gap has largely been driven by rising costs such as heating buildings and leisure centres as well as reduced income.
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As well as the ten libraries, a leisure centre could also close and other services could be cut back.
In total these are valued at £39.5m according to a council report. The council is required by law to set a balanced budget before the next financial year which begins in April.
Councillors have been warned that if this isn’t achieved, the council could be forced into effective bankruptcy, known as a Section 114 notice.
A report ahead of next week’s Policy and Resources committee meeting told them the cuts needed to be made because of “the need to make significant financial savings in order to maintain the Council” and “to avoid the issuance of a Section 114 notice.”
A Section 114 notice would have a huge impact on council services with anything not required by law stripped back and no new spending allowed except to honour existing commitments and contracts.
Several councils across the country including Croydon and Thurrock Councils have already done that this year.
Councillors were also warned that if this happened, “potential ministerial intervention under Section 15 of the Local Government Act 1999 which would be likely to ensue.”
If this were to happen, a government intervention similar to what has taken place in Liverpool in recent years could arise, with commissioners sent to the council to oversee decisions.
However, the Echo understands Wirral is in a better financial position compared to last year with its finances still under review of an Independent Assurance Panel.
A Wirral Council spokesperson said: “It is clear from the current budget projections that the council is faces very difficult choices in the coming months as we continue to contend with increasing costs through inflation and challenging economic circumstances.
“This a national issue and one which affects local authorities across the country, however, it is expected Wirral Council, like many other councils, will need to make substantial savings to set a balanced budget – which is a legal duty of the council – for the coming year.
“To achieve this we are having to review everything we do and how we do it to ensure the council is fit for purpose and able to meet the needs of residents and businesses of the borough, including ensuring the most vulnerable in our communities continue to be looked after.
“At this point no final decisions have been made and there is still a lot of work to be done. However, the authority will need to make significant financial savings in order to ‘maintain the council as a going concern’ and to avoid potential ministerial intervention.
“Final budget proposals will be presented to the council’s Policy & Resources Committee on 15 February which will make recommendations to the subsequent meeting of full Council.”
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