Dire state of Kirklees Council’s finances revealed as local authority seeks to save £47million to achieve a balanced budget next year

According to a report to the council’s corporate governance and audit committee that was discussed on July 14, the council’s financial position is becoming “significantly more challenging” with the local authority warned to take note of the “severity” of its medium-term financial outlook.

Millions of pounds need to be saved across the council’s departments to put the local authority on a stable financial footing.

The report points out that historically, the council has a strong track record of managing its budget with a relatively minimal overspend of £41,000 in the financial year of 2021/22.

However, the council recorded a £27m overspend on its budget in 2022/23.

To alleviate some of its financial difficulties in the last financial year, the council used a substantial amount of its reserves. While this may have helped the council on that occasion, the money could only be used once, leaving the council scrambling to find other money saving methods.

How much the council needs to save

As stated in an email informing staff of the upcoming redundancies, £47m needs to be saved across the council to balance the books.

In the last financial year, Kirklees Council around £27m more than the budget it set in 2022.

However, the council’s budget gap is forecast to increase over the course of the next five years, with the most drastic increase anticipated to be from £16.4m in 2023/24 to £31.4m in 2024/25.

How it plans to make the savings

Last November, the council put in place some immediate measures to save the council some cash. This included staff working from home, buildings being mothballed and freezing recruitment for posts that are not “critical to life and limb”.

In February, Coun Paul Davies, cabinet member for corporate services, told the council’s cabinet that there was “no option” but to slash millions of pounds across council departments to address the local authority’s budget shortfall.

To do so, Coun Davies explained that council tax bills for Kirklees residents would be upped by 4.99 per cent, services would be delivered in a more efficient manner and that a phased approach would be taken to the delivery of the council’s capital programme which includes major projects such as The George Hotel and Huddersfield Blueprint.

Now, with hundreds of staff redundancies on the way, it appears that such measures were not drastic enough.

Why this has happened

The council attributes its financial difficulties to the cost of living crisis, inflation and an increasing demand on council services.

According to the council, inflationary pressures on pay, energy, goods and services added an extra £15m to the council’s budget over the course of the year.

Extra demands of services like roads maintenance, services for children with extra needs, and funding for home care services added a further £12m to the council’s budget.