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Wolverhampton Council facing £3 million funding shortfall

The authority’s cabinet agreed to begin the consultation process on its budget for 2021-22 with savings of £8.7 million needed to be achieved across departments.

Budget purse strings at City of Wolverhampton Council will have to be tightened to find almost £9 million worth of cuts next year.

Councillor Louise Miles, cabinet member for resources, told the meeting on Wednesday (July 29) officers will now work to identify where the cuts could happen.

Earlier in the meeting, Councillor Miles said the council was on track to break even for this year’s budget but that didn’t take into account financial pressures caused by Covid-19.

At present, the authority is facing a £3 million shortfall in funds as a result of its recovery work to tackle the pandemic.

Councillor Miles said: “We will begin work on the projected savings for the next financial year where even without Covid we do have to make savings of £8.7 million.

“Over the summer, officers will work in various departments to achieve those savings and they will be brought back to cabinet in October.”

She added: “At this early stage of the year (for 2020-21), the general fund projected out-turn is forecast to achieve a break even position against the net budget.

“However, this doesn’t take into account the full impact of the costs of Covid-19. At present, after grant funding, there is still an immediate cost pressure to the council of £3 million.

“We have moved money from reserves into a new recovery reserve which enables us to deal with that but then there will be further projections of the full cost of recovery work and any costs related to a second wave of the virus.”

She added a new electoral reserve had also been created to hold funding from this year’s local elections that couldn’t be held due to the pandemic. This will now be used next May.

Cabinet also agreed to write off a number of remaining debts owed to the authority that cannot be recovered.

In total, more than £200,000 of debts including unpaid council tax and overpaid housing benefits has been written off.

Councillor Miles said these were subject to the “most rigorous criteria” before decisions to write them off were taken.

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