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Kirklees Council spends £7 million over budget as 'local government finance is in crisis'

todayJuly 13, 2024 2

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Kirklees Council spent more than £7m by the end of the last financial year – and Leader Cllr Cathy Scott says there is “no time for complacency”.

Towards the start of the 2023/24 financial year, the council was projecting a £20.3m overspend on its annual budget of £380m, with the threat of effective bankruptcy looming over the local authority.

A combination of inflation, increased demand for services like social care and child protection, and the cost of living crisis were highlighted as the driving forces behind the council’s financial predicament.

Read more: Vile Huddersfield rapist who preyed on young boys given more jail time

A report to this week’s Cabinet meeting showed that the local authority had an overspend of £7.3m by the end of the previous financial year – £13m lower than the initial forecast- and a reserves balance of £61.2m.

While the council was able to stave off a Section 114 notice last year, tough decisions had to be made. Non-essential spending and recruitment were frozen, building closures planned, and staff redundancies on the cards. Residents have also seen the maximum increase applied to their Council Tax bills.

Leader of Kirklees Council, Cllr Cathy Scott.
Leader of Kirklees Council, Cllr Cathy Scott.

At the meeting, Councillor Scott said it was important to note the positive news in the report, but that the council has “still got a long way to go”.

She said: “As the report says, our overspend has reduced from £20m in the early part of the year to £7.3m at the end of the year. While this improvement on our bottom line is positive, it is still the case that local government finance is in crisis.

Read more: The ‘urgent and essential’ plans to give Kirklees buildings a makeover

“Five councils have effectively declared bankruptcy in the last two years and a further 19 have extra government support to bring them back from the brink. Overall the Local Government Association estimates a £6bn black hole in council finances in the next two years.

“Increasing demand for essential services like social care for adults and children are driving the pressures for councils like Kirklees – that is clear from the report – the demand for home care support for older residents, placements for children who need vital care and nursing home provision.

“These are just a few of the factors that are putting Kirklees and councils across the country under immense pressure year after year.”

Read more: Sorry state of Kirklees’ roads revealed as council need to find £250m for necessary works

Councillor Scott told the meeting that while inflation has slowed, costs are still “much higher” than anticipated, with the effects of the cost of living crisis still being felt. The councillor also said that Kirklees “remains underfunded” compared to other local authorities, with this placing an even more severe pressure on council budgets.

She said: “That’s why this council has been taking decisive action to reduce the costs to transform the services. That action has been successful in stabilising our position. Not every council can say that.

“This is no time for complacency. Those with underlying pressures, especially social care, will continue to put pressure on our budgets. We need to maintain our focus in good financial management and continue to be open with our residents about the challenges.”

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