Telford & Wrekin's council tax level ‘unsustainable’ says report

In a report, chief financial officer Ken Clarke says Whitehall is “shifting the responsibility” for funding services from central to local government, creating a “stark challenge” for town halls.

Telford & Wrekin Council has responded by making savings and raising income from commercial ventures, he says, and his report contains plans for further cuts, reforms and income worth £5.9 million.

Councillors are expected to approve the authority’s £406 million 2021-22 budget, which includes a council tax increase of just under five per cent.

Mr Clarke writes that Telford & Wrekin Council has had to “make ongoing savings of £126.4 million in order to set a balanced budget, due to significant cuts to the grants provided by government” during “more than a decade of severe financial constraint”.

Demand for services and the cost of delivering them has increased, he writes, adding that the government is “continuing to shift the responsibility for funding essential local government services from government grants to local tax payers”.

“Councils are, therefore, faced with a stark challenge,” Mr Clarke adds.

“The council will have to find more budget savings and also ask residents to pay more.”

In Telford & Wrekin this process has included “increasing income from new commercial ventures such as Nuplace as well as significant budget cuts that have seen the workforce cut by over 1,600 posts”, he says.

Housing

Nuplace Ltd is a housing company owned by Telford and Wrekin Council. A cabinet report in November 2020 said it had delivered 329 new homes with 137 approved or under construction and plans 320 more.

A chart accompanying Mr Clarke’s report compares 2020-21 band-D Council Tax rates “for equivalent unitary services” across the Midlands before police, fire service and parish council precepts are added.

The average among the 23 authorities is £1,549.92. Nottingham City Council is highest, on £1,808.31.

Shropshire is sixth-lowest with £1,443.62 while Telford & Wrekin’s £1,353.48 rate is the lowest.

The borough’s proposed band-D rate for 2021-20 is £1,421.02 – a 1.99 per cent increase in the core council tax rate and three per cent in the ring-fenced adult social care precept.

Mr Clarke writes that Telford & Wrekin’s “comparatively low level of council tax is not sustainable in the current financial climate”.

Savings

He adds: “Whilst the council has a track record of robust and effective financial management and has adopted, by necessity, more commercial approaches to generate additional income in order to invest in the provision of front-line services, the scope for further budget savings is more limited than previously as many activities have already faced very significant reductions.”

Before the council tax increase is taken into consideration, the budget has a £9.7 million gap.

The council tax increase will bring in an additional £3.7 million.

An appendix to Mr Clarke’s report lists 12 areas where savings worth £5.9 million are planned.

The largest are “staff restructures, staff savings and capitalisation”, worth £1.1 million throughout 2021-22, income generation, through Nuplace, leisure services and other sources is worth just under £885,000 and £800,000 in savings from changes to the children’s safeguarding system.

Savings through that last item “will be reinvested within the service rather than reducing the safeguarding budget”, Mr Clarke adds.

Mr Clarke’s reports and the budget and tax proposals will be discussed at a full meeting of Telford and Wrekin Council on Thursday.