Telford & Wrekin Council's budget shortfall increases
The budget shortfall facing Telford & Wrekin Council over the next three years is growing due to cuts in Government grant and the pressure of inflation and demands on services it hasd been revealed.
In 2010, it was announced that the Council had its most challenging Government grant settlement ever, forcing unprecedented cuts in grant income of £26.7 million over the next three years at a time when grants would previously have increased just to cope with inflation.
A report to the Council's cabinet says that the grant cuts, combined with the effect of sustained inflation and service pressures, will force it in real terms to find around £40 million by 2015. Of this some £9m has been met from ongoing savings in the current year and the Council faces a further £21m of the deficit in 2012/13..
The Council is already seeking to cut 20 per cent from both its staff through a major restructuring programme and non-staff budgets while staff pay is expected to be frozen for four years until 2013/14.
The Council, as part of its 100 day budget following May's elections, has also recommended reducing its borrowing to finance capital schemes, including scrapping the proposal to build new Civic Offices in Southwater.
This reduction in borrowing alone will by 2015 help to save almost £3 million a year in reduced debt charges, money that will be used to reduce cuts to key services.
Cllr Bill McClements, cabinet member for resources and service delivery, said: "Previously no allowance had been taken for the continued high inflation rate, but looking at the economic forecast we must be realistic about the scale of the challenge we face.
"Sustained inflation pushes up the savings we need to find. The Government previously took into account inflation in councils' grant settlements, but now no longer does.
This passes the inflation buck back to hard pressed councils who are also seeking to absorb unprecedented cuts in grant.
"It means we must meet spiralling costs, such as those for energy, that follow inflation."
Council leader Kuldip Sahota added: "We are doing everything, we can to protect frontline services against unprecedented cuts in Government grants.
"We are also doing all we can to consult people on their priorities and gain their views and will start a major borough wide consultation on this towards the end of the year.
People can already give us their views through schemes like our online suggestion box or budget calculator.
"The scale of the challenge we face means that we cannot guarantee that every services and every job can be protected.
"But through our co-operative council approach we are confident that we can find ways that will help limit the cuts that we have to make."
