Council Prudent With Finances to Manage Future Budget Pressures

City of Wolverhampton Council’s cabinet will next week receive confirmation that prudent financial management enabled the authority to balance its books during 2020-2021.

Notwithstanding the costs of managing the immediate emergency phase of the pandemic, the council was able to end the financial year within budget, without having to draw down any general reserves. 

The Budget Outturn 2020-2021 report, which will be considered by cabinet councillors next Wednesday (JUNE 16), will detail how council departments carefully managed their finances over the year, including holding back on projects and keeping vacancies unfilled, to ensure the overall budget came within 0.26% of its target. 

As the council continues to classify its budget as a red risk with a forecast deficit of almost £30 million by 2023-2024, last year's underspend will be used to ease some future pressures, as will a newly created budget strategy reserve. 

Councillor Ian Brookfield, Leader of City of Wolverhampton Council, said: “Covid massively distorted our budget last year, it meant that certain council services were unable to operate as normal and therefore departments spent less than they ordinarily would because it was all hands to pump dealing with the pandemic emergency. 

“This, combined with our planned and prudent financial management, led to a small underspend which will be used to ease future pressures because it is vital to remember we continue to forecast a deficit of almost £30 million by 2023-2024. 

“This council has been forced to make cuts of £235 million due to reductions in government funding over the past 10 years and we have absolutely no certainty over how government intends to fund councils in the future. Based on the very limited information provided by the government, we continue to be prudent with our finances and we’re planning for the continuing austerity ahead until we hear any different. 

“In the government’s budget earlier this year, funding for local councils was not mentioned, we literally have no clue what our funding will be beyond the money we have been given for this financial year. 

“I continue to urge the government to give us the tools we need to do the job so we can deliver our ambitious long-term plans for our city and help our communities and businesses to ‘relight’ from the shadow of Covid. 

“The impact of the pandemic is not going to disappear, it will be felt for years to come in terms of businesses which have gone bust, unemployment and associated problems of poverty and mental health issues. 

“We need a guarantee of sustainable funding to be able to realise our big ambitions for the City of Wolverhampton, to be able to make long-term plans and so we can confidently emerge from this pandemic stronger than ever and looking forward to a far brighter future.”