Rochdale Council facing £22m black hole amid ‘continued uncertainty’ over government funding

Rochdale Council's cabinet has been told the council was looking at a ‘budget gap’ of £22m between now and 2025.

Head of finance Julie Murphy told councillors that there was ‘significant uncertainty as to the level of government funding for local authorities beyond the current financial year’ and uncertainty over the ongoing impact of Covid-19.

No cuts are proposed in 2022/23, but reserves will be used instead to ‘smooth over’ any short term deficits.

However, this is only for addressing the impact of the pandemic.

Gaps for 2023/24 and 2024/25 currently stand at £10m and £12m respectively and would need to be plugged with either more government cash, or by axing services.

The report was greeted with dismay by Councillor O’Rourke, portfolio holder for environment and facilities.

“It’s just concerning to hear that phrase ‘significant levels of uncertainty’, he said.

“After 11 years of austerity the fact that we are still in the position where our financial position is uncertain beyond the current financial year is really, really worrying.”

Councillor O’Rourke added that auditors gave the council ‘rave reviews’ because it was ‘prudent’ and worked hard to balance the books.

“We play by the rules,” he said.

 

 

“For a council like ours, with the level of deprivation we have, to be uncertain beyond the current financial year is an absolute scandal.

“It’s an absolute scandal that the government is putting us in this position.”

But he welcomed the ‘budget challenge sessions’ councillors will take part in over summer. This will include working on a savings programme to ‘support the 2023/24 budget onwards’.

“If we did stop being prudent, then this way hell lies,” he added.

“Because we are doing our absolute best here, following the rules, doing our best for taxpayers in this borough.

“And yet year after year we are being slapped in the face with more and more cuts. When does it end?”

Finance officers are working on a number of assumptions in planning upcoming budgets. These include a 2% increase in council tax and discretionary fees and charges each financial year up to 2024/25.

Councillor Carol Wardle, portfolio holder for corporate delivery, also hit out at the ongoing uncertainty – saying the authority was left ‘plucking figures out of the air’ when planning its budgets.

“You can’t run a sweet shop or a whelk stall like that,” she added.

Consultation will be undertaken throughout the year on various aspects of the budget setting process.

The revenue budget 2022/23 and provisional budgets for 2023/24 and 2024/25 will be recommended by cabinet on 10 February 2022 for approval at the council’s budget-setting meeting on 23 February.

The meeting of Rochdale Council’s cabinet was held on Tuesday night (27 July).

Nick Statham, Local Democracy Reporter