Council leaders call for urgent Fair Funding Review as they set toughest budget yet

Council leaders are calling for an urgent review of government funding before the authority’s financial position gets ever more precarious.

They warn that Bury cannot go on without getting a fairer deal which is desperately needed to meet the soaring costs of inflation and huge rises in demand for services.

A report to be presented to full council on Wednesday outlines how these factors have placed £11 million of cost pressures on the council since 2022.

More than 1,300 local residents have already signed the Let’s Fix It Together petition calling for a better deal, as Bury is among the poorest funded councils in the country.

The report says that Bury needs to make £40 million of savings over the next three years to balance the books – with £25 million in the first year (2024/25).

Councillor Eamonn O’Brien, leader of the council, said: “Fourteen years of austerity has stripped more than £100 million from our resources, and we simply cannot go on like this.

“On top of inflation, we have seen a big rise in the demand for services, particularly in adult social care and for children with special needs. These are crucial services that we must provide, but they are also among the most expensive – social care accounts for two-thirds of the council tax.

“Sooner or later we will be reduced to providing only the services that we have to by law.”

He added: “Last summer, the council declared itself to be in a ‘state of financial distress’ and conducted a review of all its financial systems and processes. This looked at all aspects of the council’s finances, from staffing levels to the use of balances and reserves.

“This has ensured the immediate viability of the council, but it is not a long-term solution. Reserves can only be spent once and therefore work is well under way to identify recurring financial savings over the next few years.”

For 2024/25, the council is proposing to use £15 million from reserves and £10 million in savings, efficiencies and income generation.

The full council will set the budget for 2024/25 at its meeting on Wednesday 21 February.

The figures are based on a rise in Council Tax of 2.99% for general council services, plus a further 2% earmarked for adult social care.

Cllr Richard Gold, cabinet member for finance and communities, said: “The Government says we’ve had our spending power increased by 7.7%. Which is true, but it expects that we’ll put up Council Tax by the maximum allowed.

“So really the funding increase is being funded by the local tax payer – and increasingly so. Now, 57% of our income comes from the Council Tax – up from 50% just nine years ago. While there has been a recent increase in one-off grants and fixed-term funding from central government, our core funding has gone down by 55% since 2010/11.”

The Institute of Fiscal Studies published data in 2023 which highlighted Bury Council’s position in the bottom 20% worst-funded councils in terms of money to spend per resident.

Cllr Gold added: “We are suffering from the lack of a long-term, sustainable funding policy for local government which was first announced in 2016.

“This has led to short-term funding settlements which prevent the development of longer-term saving strategies. Going from year to year is not the way to deliver long-term sustainability.”

To sign the Let’s Fix It Together petition, go to https://www.bury.gov.uk/council-and-democracy/budget-campaign-petition

ENDS

Press release issued: 19 February 2024.