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Councils facing a cash meltdown as cuts bite
SMALL councils face becoming unsustainable if ongoing cuts to their funding continue, according to a new report.
Grant Thornton’s new document into the status of local government finances, called Towards a Tipping Point? says there are fears for the future of town halls.
It comes as district councils across Worcestershire have admitted they are being hammered by continuous funding reductions.
Worcester City Council needs to save an extra £250,000 by 2015 on top of the £1.2 million already due to be slashed from spending. Rural town halls are being hit even harder, with district councils in Malvern and Wychavon both requiring fresh cuts of about £1 million during the same time period.
Wychavon District Council is the worst hit authority in the county after the Government slashed funding by seven per cent in 2013/14 and 15 per cent the following year. The report says there is the “possibility” of smaller councils becoming “unsustainable”, and that tougher times are ahead unless the economy picks up.
It also says there are concerns about “strategic financial planning”, suggesting councils are struggling to balance the books and focus on delivering services.
Councillor Bob Banks, the cabinet member for resources at Wychavon District Council, said: “It really is a good job we’ve relied on good husbandry in recent years, which will give us time to prepare a plan for making the savings we need to make.
“What we are being asked to do will require a very concentrated approach, but there is no doubt we are being hit very bad.
“We are making our representations to the Government but whether it’ll do any good, I don’t know, the jury is out.”
Worcester City Council has said it is having to make “savings on top of savings” but is hoping 26 job cuts by 2015 will go some way to plugging the shortfall.
Jon Roberts, regional head of public sector assurance at Grant Thornton, said: “Our analysis and discussions with the sector indicate a potential tipping point is on the horizon.”
He said that confidence is “weaker than a year ago”, when many councils hoped 2013 would show signs of improvement.