Published on

2 October 2023

Borough council's financial position explained

Along with most local authorities in the country, Wokingham Borough Council is facing an extremely challenging financial position caused by high inflation, increasing resident needs and years of continuous low funding from Government.

Wokingham Borough Council building

The number of councils that have effectively gone bankrupt, or are close to that state, is increasing and, although Wokingham Borough is not facing this at this stage, it is important that residents understand the true picture.

The need for savings

In order to set a balanced budget next year, the borough council must find savings or generate extra income of more than £15million. These savings need to be made from our regular running costs and will be ongoing, they cannot be made just by cancelling or postponing one-off projects.

The causes: Inflation

Although the rate of inflation has reduced in recent months, prices are still rising and have been doing so at rates not seen for 30 years. This high inflation has caused real cost increases to Wokingham Borough Council of about £10.8million this year. The inflation rate is expected to come down, but costs will not reduce and so this is an ongoing impact to the borough.

The causes: Increasing needs

An increasing number of people in the borough have care needs that the council must meet. These include children with Special Educational Needs, children in care, adults with learning difficulties or physical disabilities. The needs residents have are also becoming more complex. The additional cost of providing these services this year is about £9.7million.

The causes: Continuous low government funding

Wokingham Borough Council receives about £30million a year less from the government than the average local authority – that works out at about £400 less per household each year. This is due to the formula the government uses to slice up the overall funding pie it allocates to local authorities. These formulas do not factor in vital issues such as the number and complexity of children with Special Educational Needs, they are about ten years out of date and bear no resemblance to reality of local needs or costs.

Executive member for finance Cllr Imogen Shepherd-DuBey said: “The triple threat of inflation, increasing needs and low government funding, is causing us significant challenges. We have made savings and efficiencies and are increasingly looking for sensible income generating opportunities so we can continue to provide high-quality services to our residents. As a result of these measures, we have been able to maintain a balanced budget, unlike an increasing number of other councils around the country.”

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