Town hall chiefs warned of £29.5m gap in fu­ture fi­nances

Middleton Guardian - - FRONT PAGE -

FUNDS raised through busi­ness rates and coun­cil tax will not be enough to make up the fu­ture short­fall from gov­ern­ment fund­ing, town hall chiefs have been warned.

A re­port cov­er­ing the pe­riod 2019/20 to 2023/24 says Rochdale coun­cil’s need will be ‘greater than the re­sources it can gen­er­ate’ due to ris­ing de­mand for ser­vices and sig­nif­i­cant changes to how the author­ity is funded.

The medium term fi­nan­cial strat­egy fore­casts that by 2023/24 the gap in re­sources will grow to £29.5m from what is cur­rently a bal­anced po­si­tion.

Rochdale coun­cil cur­rently keeps 99 per cent of busi­ness rates raised in the bor­ough as part of a four-year pilot scheme which be­gan in 2017 and also in­cluded the other nine Greater Manch­ester au­thor­i­ties.

As part of this set­tle­ment it has seen two main sources of gov­ern­ment fund­ing re­moved - the Rev­enue Sup­port Grant (RSG) and the Pub­lic Health Grant (PHG), but busi­ness rates top-ups en­sure it should not lose out on cash as the scheme is in­tended to be ‘fis­cally neu­tral’.

The re­port’s pro­jec­tions are based on a con­tin­u­a­tion of 100 per cent busi­ness rate re­ten­tion, but it is not known if this will be the case for pilot ar­eas from 2021, as the gov­ern­ment is plan­ning to im­ple­ment a 75 per cent rate for other lo­cal au­thor­i­ties. There are also con­cerns that changes to how busi­ness rates are cal­cu­lated could re­sult in coun­cils no longer be­ing fully ‘topped up’ to com­pen­sate for a drop in gov­ern­ment fund­ing.

And, like other coun­cils, Rochdale is also un­able to raise its coun­cil tax be­yond cer­tain lev­els with­out call­ing a ref­er­en­dum.

Cur­rently this stands at two per cent for gen­eral ser­vices and six per cent over three years (2017/18 to 2019/20) for adult so­cial care.

It is un­clear whether the Gov­ern­ment will al­low au­thor­i­ties to charge an ad­di­tional adult so­cial care pre­cept from 2020/21 on­wards and the lack of clar­ity on fu­ture fund­ing is an­other headache for town hall bosses.

The re­port reads: “The re­view of the medium term fi­nan­cial strat­egy has been un­der­taken against a back­ground of sig­nif­i­cant re­duc­tions and changes in grant fund­ing and in­creas­ing costs due to ser­vice pres­sures.

“These fac­tors could jeop­ar­dise the coun­cil’s sus­tain­able fi­nan­cial po­si­tion un­less bud­get sav­ings con­tinue to be de­liv­ered along­side the de­liv­ery of the coun­cil’s cor­po­rate pri­or­i­ties.”

It adds: “The pe­riod cov­ered by this fi­nan­cial strat­egy will con­tinue to present our coun­cil with some of the most sig­nif­i­cant op­er­a­tional and fi­nan­cial chal­lenges ever ex­pe­ri­enced by those lead­ing and man­ag­ing the de­liv­ery of lo­cal ser­vices. Man­ag­ing our money well is now more im­por­tant than it has ever been.”

Coun­cil leader Allen Brett has urged the gov­ern­ment to move away from its vi­sion of self-re­liant lo­cal au­thor­i­ties and pro­vide the nec­es­sary fund­ing for vi­tal ser­vices.

He said: “Rochdale’s po­si­tion isn’t unique as, like many other coun­cils, our fund­ing from cen­tral gov­ern­ment has been dras­ti­cally re­duced since 2010 with more cuts to come.

“To ad­dress this prob­lem the gov­ern­ment needs to ur­gently find a long-term so­lu­tion to the so­cial care fund­ing cri­sis, scrap its dam­ag­ing aus­ter­ity poli­cies and aban­don the ab­surd idea that coun­cils like Rochdale can raise enough money lo­cally to pay for ser­vices. The gov­ern­ment can­not ex­pect us to con­tin­u­ally do more with less.”

Bor­ough coun­cil of­fices at One River­side

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