Council facing financial crisis (From Worcester News)
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Council facing financial crisis
5:20pm Sunday 30th September 2012 in News By Tom Edwards
A LOOMING financial crisis is affecting Worcester City Council – with warnings a budget gap could balloon to more than £1 million by 2017.
A leaked document also reveals how bosses are openly talking about creating a “survival strategy” for the next five years, which could include hiving off services to other providers in the private sector.
City councillors have been invited to a private briefing on Monday where they will be told about the scale of the woes.
The document suggests the “easier” savings have already been made and that the pain will get worse before it gets better.
A budget gap of £257,000 is forecast to open up next year, and it will grow to £842,000 by the 2016/17 financial year.
But that black hole is built on a number of assumptions – including a 2.5 per cent increase in council tax every year.
The council’s Medium Term Financial Strategy, a blueprint which spells out the situation over the next five years, is currently being re-drafted and revised figures are due out as soon as next week.
A source said: “It’s pretty grim stuff – if the council was a private company, the current position would be completely unsustainable.”
The document, a series of slideshows, mentions a number of other financial pressures which are upsetting the balance sheet, including £40,000 for inflation, £70,000 less than expected on racecourse rents and a £70,000 drop in car parking fees.
Unless revenue improves a total of £300,000 could be added to the deficit, taking the gap to well over £1 million.
Handing over services to new providers, known as commissioning, has become increasingly common at other authorities, including Worcestershire County Council .
Councillor Andy Roberts , cabinet member for finance in the city, said: “We’ll look at commissioning if it maintains a service, is more efficient and protects employees.
“I don’t underestimate the financial challenge ahead of us, but it’s exactly the same for councils up and down the country at the moment.
“Our pledge is still to freeze council tax.”
There are three reserve pots with a total of £4.6 million in.
Comments(11)
mrwrighty
says...
7:22pm Sun 30 Sep 12
The axe will always fall on those nearest the ground, the higher you are the less you are affected.
Its about time we had a cull of nonsense non productive jobs at the top. You will very easily save the money.
skychip
says...
7:25pm Sun 30 Sep 12
RobbieRobster
says...
7:41pm Sun 30 Sep 12
TmP
says...
8:16pm Sun 30 Sep 12
jb
says...
8:46pm Sun 30 Sep 12
I presume that 'commissioning' is bringing in private service providers, which means privatising services. I suppose 'commissioning' sounds better to the councillors, less obvious.
More Tea Vicar
says...
8:19am Mon 1 Oct 12
drowningnotwaving wrote:A great deal is made of the 'benefits' of the university, many of which are visible, in terms of buildings and development in the city.
about time the University started to contribute to City coffers. Why should Worcester tax payers pick up cleaning and security bill for drunk students
But I would be curious to see a full analysis done, taking the costs into account. For example, an influx of young people into the city might bring the costs you mention, but it might also bring much needed revenue to pubs and clubs, and other businesses catering for students.
Then again, there are costs. Like the ones you mention. Plus, large numbers of extra people means increased demand for housing. Where does that leave our own young people, the kind that might not be able to afford to go to uni, or even want to.
There are plenty of questions about the massive expansion in uni places under Labour, not least the actual value of a degree. So what kind of education is 'our' uni providing?
And who to? There is no shortage of stories about immigrants using British university as a means to get to and stay here, illegally.
There is a possibility that universities are organisations which privatise benefits, in terms of salaries for staff, but nationalise the costs, in terms of higher rents, maybe even benefits payments etc, security costs, illegal immigration, and so on.
cbeardwood
says...
10:19am Mon 1 Oct 12
Cornwall, Durham, Shropshire, Wiltshire and Northumberland all took the unitary route in 2009, and have made substantial savings, but sadly because of pressure from districts the recommended move to a unitary Worcestershire was thrown out.
What value is added to our County by employing 6 District Chief Executives together with executive teams plus well over 200 district councillors, many of whom serve as members of district and County Councils and draw allowances from both.
Frostyman
says...
1:55pm Mon 1 Oct 12
TheIndependentPolitiEven the Gifford hotel multi storey has realised it has to change. I parked there for the first time since my last visit 3 years and they have cut all there prices and it was nearly full!! i will be avoiding the council sites where i can as i get better value for money there!! maybe the council should take note of things like this!!
cian wrote:
I imagine the £70,000 drop in parking revenue is due to being able to park at Asda - 3 hours for a £1. Compared to the cost of parking that you used to have no choice in paying at the old Giffard Hotel multi storey - public loyalties have shifted. How much longer can the city justify having its own parking wardens?
cbeardwood
says...
2:01pm Mon 1 Oct 12
otherwise always Tory. Furthermore the only non Tory district in the county is Redditch which became Labour again this year.
District Councils collect rubbish, the county disposes. They are the local planning authority, they run car parks
and a few other odds and ends. The district council model is now outdated and the government is letting them wither away. Let us get on with the inevitable and act now
pronstar
says...
2:49pm Mon 1 Oct 12
TheIndependentPolitiI see you've learnt the correct use of the word 'too'.
cian wrote:
fortunately too, the grubby socialist councillors who line their own pockets with their little earners 'from their Pet Projects' are kept under control 'locally' and are kept well away from Westminster or Brussels.
drowningnotwaving says...
6:41pm Sun 30 Sep 12
Why should Worcester tax payers pick up cleaning and security bill for drunk students