Wirral Council has been criticised for “significant weaknesses” in how it manages risk to its finances.
This was revealed in an independent review of the local authority's finances from April 2021 to April 2022 by auditors Grant Thornton, though it said improvements have been made since then to address the issues.
The concern over the council's value for money comes as the borough plans to pass this year’s budget as well as make £35m in cuts over the next four years to balance the books and avoid declaring bankruptcy.
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In 2024, Wirral Council is expected to have to make £12m in savings to close a budget gap, nearly £3m in 2025, rising to £10.4m in 2027.
This would mean more than £35m in cuts to council services and savings up until 2028 based on the latest forecasts. Councils have to by law set a balanced budget each year or potentially face declaring bankruptcy.
Councillors are expected to approve this year’s budget today with the latest version, supported by Labour, the Greens and the Liberal Democrats, seeing plans to close nine libraries, playgroups and other services thrown out.
To close this year’s gap, the council is planning to raise council tax by 4.99% from April 2023 for everyone. In future years, extra charges would be placed on empty and second homes from 2024 to raise more income.
In the audit of Wirral Council’s finances in 2021 and 2022, a report published in by Grant Thornton praised the council setting a balanced budget last year but added: “We however have continuing concerns with regard to the council’s financial sustainability and continued action is needed by the council to resolve its budget gap.”
The report also said council management’s assessment of how much it would repay debt as optimistic and identified serious issues in how the council manages its resources, risks to its financial stability, and its ability to make key decisions.
However no issues were found in how the council manages its pension funds and the value of its land and buildings and improvements had been made in terms of decisions and not needing extra government funding to balance the books.
Auditors also said that while risk of fraud in the council couldn’t be ruled out completely, it was considered incredibly unlikely and “our work has not identified any issues in relation to improper expenditure recognition so we have nothing to report on this matter.”
Wirral Council is expected to move to a new system in April which will help improve how it manages its finances though concerns have been raised by Conservative councillors about payments and when that would be brought in.
In an annual governance statement signed by Chief Executive Paul Satoor and council leader Janette Williamson, they said Wirral Council “continues to build upon the work of previous years, constantly improving, as a Council that is learning, maturing and delivering for its constituents."
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