Finance chief warns current cuts may not be enough

In a letter to leaders of the council’s Conservative and Labour groups, Iain Newman, the director of finance and legal, predicts the authority will still be more than £10m in the red in coming years.

He urges a review of all the council’s services including leisure centres and halls, car parking, waste collection and recycling.

Mr Newman said: “We need to put a stop to those deficits and indeed move into surplus to restore our reserves to a sustainable level.

“To do this, we will need to look at options including reviewing all functions delivered by the council and present back options to reduce, outsource or cease them.”

Dudley already spends 10 percent less per head than the average metropolitan borough council and its top accountant believes even more may need to be done.

Mr Newman added: “Given our already comparatively low level of expenditure, even these difficult decisions may not be enough.”

Despite the bleak message, Dudley’s Council’s Conservative leader, Cllr Patrick Harley, remains positive.

Cllr Harley said: “It’s a clear message to both leaders to relay to their groups, we are in a better place than we were in October but we still have a lot of work to do.”

Labour’s opposition leader, Cllr Pete Lowe says the council has been too dependent on dipping into savings to fill financial black holes.

He said: “Whilst it is certainly true that the £122m austerity cuts from the Tories nationally have had a significant impact, the over reliance on reserves and placing party loyalty over people has led us to this dark place.

“Whilst it will be difficult, we will do all we can to work at pace, putting our finances back on safe ground whilst, where we can, protecting our communities that need us most.”

Mr Newman’s bleak assessment says decisions to set low council tax rises by previous administrations from both parties means the council is £10m per year worse off than it should be.

He says future council tax increases will have to be as high as the authority is allowed to make and there may have to be requests to the government for permission to impose bigger rises to dodge issuing a s114 order, which means the council believes it is bankrupt.

Cllr Harley said: “We haven’t ignored the warnings, we have come on leaps and bounds, we have gone from a £7.5m deficit to a surplus this year.

“The way this administration has worked with officers and partner services means we are not in 114 territory for this year or next year.

“We have got some breathing space.”

Cllr Harley described some decisions on low or frozen council tax in previous years as ‘a huge mistake’ but added he has already ordered officers to withdraw current requests to the government for extra help.

He also believes the council’s finances in coming years will be strong enough that the government would reject requests for tax rises above the maximum allowed without a referendum.

He added: “Accountants are always pessimistic, he is just doing his job.”