People in Liverpool are being asked to help decide the city council’s spending priorities for the next year, as the local authority grapples with a £57.6 million funding gap.
A Budget Calculator has been launched – www.liverpool.gov.uk/budget2020 – which gives council taxpayers the chance to choose how much they would spend in each department by using a series of sliders. It also gives examples of the risks and consequences of cutting each budget area.
Liverpool has £436 million less to spend each year in real terms than it did in 2010 – equivalent to a 63 per cent cut – due to reductions in funding from central government.
Only 14 per cent of the council’s budget is raised through council tax. This is because most properties in the city are in lower council tax bands, which pay a lower amount. It is compounded because the total amount that can be raised is reduced by 40 per cent due to the high proportion of households in the city that qualify for discounts and exemptions (eg: single people or students), or because they qualify for council tax support.
It is estimated significant further cuts will need to be made next year, at a time when the council’s reserves (or savings) have been almost exhausted. At present levels they would only be enough to pay for the cost of running the council for around two weeks.
The council is facing significant pressures in the current financial year due to an overspend of more than £15 million, primarily due to more young people being in care – with a growing number requiring complex and costly support packages.
A cross-party budget working group has been set up which has representation from each of the political parties on the council, with the elected members looking at options that have been put forward by officers.
The calculator forms part of the council’s consultation with local people before the budget is set in March 2020.
Much more information can be found at www.liverpoolexpress.co.uk/budget2020, where there is also a special Mersey Waves podcast explaining the reasons for the city’s financial predicament.
Mayor of Liverpool, Joe Anderson, said: “This is an unprecedented situation for the council – the worst financial crisis we have faced since the end of World War Two.
“We have done extremely well up till now in keeping vital services going despite losing thousands of staff and having to reduce some budgets significantly. This is in part due to our Invest to Earn strategy of helping create new businesses and build new houses to bring in additional income.
“However, we are now at a stage where there is little we can do in terms of cutting back office support and that means that any cuts we do make will have a detrimental impact on the frontline.
“That is why we want people to have their say on those services we should prioritise. It is their council tax that we are spending. It is right and proper that they should be part of the process.
“We know from when we have run the budget calculator in previous years that it has proved to be a real eye opener for those who took part, with many reporting that they found it too difficult because of the consequences of the decisions they had to make.”
Director of Finance Mel Creighton said: “This is the most challenging budget I have ever faced in more than 20 years in local government. It’s not going to be an easy task and the relatively easy ways of balancing the books are not available to us anymore.
“Over the last 10 years the council has been able to dip in to its reserves, but these now stand at £16 million and have been reduced by more than a third over the last three years.
“Setting an unbalanced budget is not an option, and the budget calculator is an important part of our consultation process and will form part of the budget setting in the new year.”