Wirral Council Near Bankruptcy if True Picture Was Known Earlier

Wirral Council faces a tough situation. They might have gone broke last year, which could have happened if they knew the current financial state. The council needs a £20 million loan from the government now. They overspent by £20 million this year.

A £34.5 million budget gap looms in April 2025. The council asked for a £40 million bailout to cover the next two years. They will repay it over 20 years and cut the budget by £25 million.

The council will likely overspend by March 31. Children’s services expect a £9.6 million overspend, and adult social care projects a £7.8 million overspend. Reports show social care drives budget issues, as the finance department overspent 17% and neighborhood services overspent by £2.3 million.

Cllr Jo Bird questioned the overspending, which occurred soon after a panel stepped down. She wondered how to avoid repeating past errors and wants Wirral Council to avoid another near-bankruptcy situation that could happen in just a few years.

Matthew Bennett responded to those questions. The panel saw the current budget, he noted, but increased activity in social care changed things. The panel and the council did not foresee that change, and office costs in Birkenhead caused no overspend, he said, emphasizing that social care demand actually increased.

Bennett stated a key point about the budget: if they knew the level of activity, it would be dire, and they might have faced a Section 114 situation earlier. The council lacked reserves to cover that overspend.

Cutting £20 million more from services would be rough, Bennett thinks it would have been too difficult, and the government would have been contacted sooner. He believes the outcome would not change.

Finances seemed better last year, Bennett said, and investments looked possible in three areas. Extra money could help clean the borough, and reduced inflation freed up £1 million, with savings also helping them at the time.

Councillors still backed a Real Living Wage of £12.60, impacting 8,000 care workers, and early intervention services stay for 7,500 people. Cllr Julie McManus called it a tough budget due to austerity.

McManus spoke about support for care workers, which was high during Covid. It’s important to keep the Real Living Wage now.

Councillors debated Hoylake Beach plans. Conservatives and Greens disagreed and argued that spent money was wasted. The council also lost £1 million in business rates, as appeals caused that financial loss this year.