Wirral Council staff will be asked to volunteer for redundancy as the local authority battles a financial crisis.
At a meeting of the policy and resources committee on Wednesday 15 January, members agreed to request a £40 million bailout from the government.
The precarious financial position is largely due to overspends in children’s and adults social care, exacerbated by rises in the cost of care packages for young people, and growing demand for assistance for older people.
Two applications for what is known as ‘exceptional financial support’ are to be made: £20 million towards the overspend this year, and a further £20 million for the next financial year to help cover the cost of making staff redundant.
Council Leader, Cllr Paul Stuart, told members: “The alternative would be for the council to fully deplete all of its remaining reserves which would leave us in an unsustainable position and unable to respond to any emergencies or unforeseen events.”
He added that even with the funding, the local authority will have to find £25 million of savings next year “which will inevitably impact on our residents and on the number of staff we employ”.
He went on: “The savings will be immensely challenging to achieve in full, in year, and will require the transformation journey that the council is already on to be accelerated.”
Director of Finance, Matthew Bennett, said the council is in a “very serious financial position” and that the funding request is “absolutely necessary” to prevent the issuing of what is known as a section 114 notice.
Opposition leader and West Kirby and Thurstaston councillor, Jeff Green, noted that the money will have to be paid back to the government over the next 20 years.
An annual audit prepared for the council by Grant Thornton has concluded that it is in “an extremely challenging financial situation with significant financial pressures creating budget overspends combined with low levels of reserves”.
A team from accountancy body CIPFA are carrying out “rapid review” of the council’s finances to see if there are any other measures that can be implemented.
The budget options for 2025/26 are set to be announced in February.
A decision over the first bailout application from the government is expected by the end of next month.
Photo credit: Nigel McIntyre