City Council announces plans to reduce budget

Worcester City Council has announced that it must make reductions in its spending to bridge a gap in its budget of £1.6m next year and possibly a further £2m in the years following that.

These are proposals at this stage and are the subject of consultation with the public (the SIMALTO exercise). They will also be scrutinised by the all-party Committees set up to examine Council policy and spending plans and, of course, with the unions representing the workforce.

David Wareing , Chief Executive at Worcester City Council said: “The underlying problem remains that which has challenged the City Council for many years and under both political administrations at the Guildhall, namely the struggle to fulfil the aspirations, expectations and statutory duties placed upon Worcester as the county town with the financial resources that it receives by way of government grant, what is raised via our element of Council Tax and the other income we can generate locally, e.g. through car parking charges.

Whilst all District Councils have different pressures there are not many of our size that have the total infrastructure Worcester City Council maintains, e.g. a fine but expensive to run Guildhall, two Museums and an Art Gallery, three sports centres and a swimming pool, a network of community centres and a wide ‘travel-to-work’ area and growing tourist and student population.”

The net budget - what it costs to run the Council in 2008/9 - is forecast to grow next year by £1.7m, however the government grant next year is only increasing by 1% (£80,000). The City Council must bridge the gap. The Council cannot do this simply by increasing Council Tax. This would require the City Council’s element of council tax to go up by 37.5%. This is clearly not possible.

The City Council has identified a number of areas where financial savings can be made and these can be seen by following this link:

Budget Action Plan PDF

The total package comes to around £3m so this could help considerably in dealing with the overall budget shortfall. However, this takes no account of the need for essential new expenditure required in 2008/9. It may be that some of the reductions proposals are not acceptable to the Council or are vigorously opposed by the public causing Councillors to think again. This will come out in the next consultation phase including SIMALTO and our consultation with the workforce. But if this package is to be watered down, other proposals will have to be identified to take their place.

What is clear is that a major component in balancing the books is a root and branch service restructuring hopefully following a successful agreement with Wychavon and Malvern Hills to share services. This assumes the City Council we will save £1m over the next four years in this way.