Wigan council’s leader has said ‘it is pouring it down’ as he plans to dip into their ‘rainy day’ funds ahead of what is thought to be a tough 2023 financially. In a world where some councils across the UK are facing bankruptcy, the Greater Manchester borough says they are ‘nowhere near’ reaching that point, but they may have to tighten their belts in some areas.
This comes in the wake of chancellor Jeremy Hunt’s statement last week. He set out his plan for cuts of £35 billion and tax rises of £20 billion to plug a gap of around £55 billion in public finances.
“It is absolutely throwing it down,” Council leader David Molyneux told the Local Democracy Reporting Service when asked about dipping into the ‘rainy day’ funds.
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“The storm that is heading over this afternoon is nothing compared to the storm coming in local government finance. Obviously we have always stated that our reserves are there for a rainy day. But now it is a rainy day.
“So we will have to dip into our reserves. Some authorities across the country don’t have this.”
One of the biggest pressures for the council is adult and children’s social care which is set to cost an additional £7.8 million and £17 million next year respectively, the Medium Term Financial Plan has claimed. Schools finances are ‘generally healthy’ but there are some exceptions, the report claims.
Despite this, the extra £2.3bn per year for schools and the £2.8bn extra next year and £4.7bn the year after for social care ‘will largely be subbed by council tax rises’ (£1.8 bn), Paul McKevitt, Deputy Chief Executive and Chief Finance Officer, explained. He went on to describe that even costs to run the council have gone up by 15 per cent and there is a budget gap of £37.1 million next year to contend with.
Mr McKevitt told the LDRS that they will get more information as to the details of these funding boosts in the next four weeks. The potential council tax rises of five per cent ‘will have to be revisited’ according to the financial plan - especially when it comes to dealing with social care services.
“We are proud of the fact we have the lowest council tax of any metropolitan borough in the country, not just GM,” David Molyneux continued. “We have acted over the last 12 years to make sure that we’ve always got our residents in mind when setting council tax.
“For six years we have not increased our council tax. I think now we are in a position where we have got to do what’s right, not just for the council but the people out there.
“That will become more clear as to what that is in the next [financial] statement around December 24. I am hopeful we will be getting our ducks in a row for next year.”
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