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Worcester council faces £300k budget black hole
A BLACK hole of up to £300,000 has been forecast in Worcester City Council’s finances, it has emerged.
The recession is battering the authority’s balance sheet, with car parking income £75,000 below budget for just April, May and June.
Now bosses say the 2012/13 financial year, which runs to next spring, is likely to end in a six-figure deficit unless “urgent” action is taken to ease the problem.
Based on the first three months of 2012/13, forecasts have been published saying income from charging for public toilets will be £5,000 below par. Trade waste fees, where the council charges private businesses for taking away rubbish, is forecast to be £100,000 below budget while building control income is also expected to be down £100,000.
Revenue from licensing fees for taxi drivers, pubs and clubs is also due to be down £25,000 at the end of the financial year.
A range of other revenue streams are being damaged, including money from disposing of certain categories of rubbish, cremation services and fees from renting floor space to exhibitors at Worcester City Art Gallery and Museum.
A report on the findings says: “The forecast at this early stage of the year is a budget deficit which could be as high as £300,000.”
It does say some areas of the council’s finances are showing surpluses, including staffing costs, and that there is provision in the budget of about £100,000 of spare money to offset some of the damage.
But that would still leave a likely deficit of £100,000-£200,000, and the report calls for “management action” to address it.
The black hole was criticised by Councillor Robert Rowden, a former leader of the authority, during a meeting at the Guildhall .
“It’s quite clear to me that even with the recent price reductions there are a number of car parks in Worcester which are cheaper than the city council’s,” he said.
“People will always go where it is cheaper, that is the problem.”
Councillor Paul Denham said: “It looks like all these deficits are down to the recession – especially areas like car parks, sports centres and so on.
“If that’s the case, what can we do? People are spending less and we need to restrict the damage.”
Councillor Pat Agar said: “These are very, very significant pressures, some of which are unnerving, I have to say.”
Lesley Meagher, finance services manager at the city council, told a meeting of the management performance and budget scrutiny committee it was “imperative” the gap is tackled.
“A management plan is being put in place to tackle the situation,” she said.
The council slashed car parking prices by up to 50 per cent for August and September in a bid to boost trade.