All but essential services face cuts, Cheshire East Council warns
All but essential services could face cuts as Cheshire East Council tackles unprecedented financial pressures fueled by soaring costs and rising demand, writes Belinda Ryan.
Board finance bosses are asking all service committees to develop an action plan to see how they can cut costs, do things differently or find ways to increase revenue.
The matter is to be discussed at next week’s meeting of the finance sub-committee.
It comes just weeks after Chief Authority Cllr Sam Corcoran told the full council: ‘I would say there are currently three types of councils – those that are going bankrupt this year, those that will go bankrupt next year and those who might survive until next year if the government does nothing to help the councils.
The board, in line with most public sector organisations, relies on government inflation targets when setting budgets and that figure was 2% but the actual inflation rate is over 10 %.
A report due to be presented to the Finance Sub-Committee on Wednesday said: “In the follow-up to the 2022/23 financial year, the national increase in inflation, from 0.4% in February 2021 to 10.1% in July 2022, has a significant impact on the cost of municipal services as well as on the cost of living for local residents.
The report says inflation is affecting several critical areas including service demand and contract inflation, wage inflation and Covid-19 scars.
Regarding services and contracts, the report states: “Costs of care are rising due to the increasing complexity of needs as well as rising provider costs related to staffing shortages and utility and fuel prices.
He adds that fuel prices are also leading to an increase in transportation and waste management services.
Wage inflation is another factor.
Cheshire East had planned local wage increases of 2.5%, recognizing potentially higher increases for lower-paid local workers. The report says ongoing national wage negotiations could see wages rise by more than 6% for some lower-paid workers.
With regard to the consequences of Covid-19, the report states: “While government funding for Covid-19 related costs has ended, there remains an ongoing impact on care services and some services funded by fees and loads.
“Waste services are also seeing continued increases in tonnage due to pandemic-related behavioral change.”
East Cheshire Council is the third largest authority in the North West and supports over 398,000 local residents with annual expenditure of over £470million.
The demand for services, combined with the soaring national cost of living, resulted in a planned result of £340m against a net revenue budget of £328.4m, meaning a forecast overall overrun for 2022/23 of £11.6m.
This will have to be funded from reserves, which currently stand at around £14million, unless significant cuts can be made or more funding comes from central government or other sources.
The finance sub-committee meeting takes place at 2pm on Wednesday 9th November at the council headquarters at Westfields in Sandbach.