Posted by: John Brace | 4th March 2019

Is Wirral Council’s budget sustainable or is it being propped up by one-off sales of land and buildings?

Is Wirral Council’s budget sustainable or is it being propped up by one-off sales of land and buildings?

                             

Vue Cinema (Birkenhead) 9th February 2019

Vue Cinema (Birkenhead) 9th February 2019

This is a collaborative piece with The Bureau of Investigative Journalism who we would like to thank for all their help.

Tonight (if you’re reading this on the day of publication) Wirral Council councillors decide at a public meeting on their 2019-20 budget (which includes a recommendation to put peoples’ council tax up).

Shortfalls in both this year’s budget (2018-19) and next year’s (2019-20) have been filled with one-off sales of assets which according to a helpful map provided by the Bureau of Investigative Journalism have totalled at least £12,718,899 over recent years.

Due to flexibility introduced in 2016 by the then Chancellor George Osborne Wirral Council has been spending these large receipts on redundancy payments, agency staff (for example in Children’s Services after the “inadequate” OFSTED report in September 2016) and “transformation”.

The problem is however that these are one-off sources of funding being used to plug shortfalls in their budget as a short-term measure which causes concern to their auditor Grant Thornton.

Purchases of property, such as the purchase of Birkenhead’s cinema have as far as I can tell been financed by borrowing money.

The downside to borrowing money is that it eventually has to be paid back (with interest). Paying the interest payments leaves less money for public services unless the income from the property is greater than this (which also exposes Wirral Council to commercial risk over the period of the loan).

Wirral Council’s ruling Labour Cabinet have recommended that Wirral Council increase the council tax for 2019-20 by the maximum allowed without a referendum.

However the 21 Conservative councillors have tabled an objection to Labour’s budget and regard Wirral Council borrowing to fund purchases of land and buildings such as the Vue Cinema in Birkenhead as “the speculative acquisition of assets of questionable value”.

Their budget objection also objects to spending on senior managers at Wirral Council, management consultants, the Wirral View newspaper, the Hoylake Golf Resort and instead asks the Cabinet to change its budget and come back with improvements to “road safety”, “cleaner streets” and “support for local businesses”.

The five Liberal Democrat councillors have submitted alternative budget proposals that ask for a reduction in consultants and interims, an exit to the contract with Kingdom and a reallocation of some funding to areas that they see of greater need.

I do not know what the views of the sole Green Party councillor and the three-strong group of independent councillors are on two budgets (Labour and Liberal Democrat) and the Conservative budget objection.

Tonight’s public meeting of all Wirral Council councillors will be held in the Council Chamber, Wallasey Town Hall, Brighton Street, Seacombe, CH44 8ED starting at 6.00 pm. The agenda and reports for this meeting can be read on Wirral Council’s website.

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Responses

  1. LOBO loans John.
    Have been up to 12% of our council tax.
    That’s one tenth of our council tax foreseeably and avoidably frittered away before we even spend ANYTHING.

    • Yes I realise that a lot of Wirral Council’s budget goes on debt interest. However unless you can find a way Paul to put more money into Wirral Council’s budget such as things such as increased taxes or refinancing their borrowing or both there’s not much that can be done about Wirral Council’s obligations (which from memory even include paying the debts of the former Merseyside County Council which was abolished in the 1980s).


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