Tough decisions lie ahead as it has been revealed that nearly £50 million of council tax could be used to cover funding shortfalls caused by cuts from central government.
The news comes as part of proposals that would, if implemented, see Wokingham facing the need to find millions of pounds of savings over the next three years.
The government’s current proposal could introduce a single funding formula for all councils phased in over three years, with no protection for those most affected by the end of the settlement period.
This comes after years in which Wokingham has been one of the lowest-funded unitary councils in the country.
It is calling for mitigation that could protect it, and other affected councils, from the worst impacts of the changes, and is seeking to build an alliance with other authorities to make the case to government.
Council leader, Cllr Stephen Conway, told Wokingham Today that in terms of making cuts or being forced to generate additional revenue: “.. it’s far too early to be able to speculate, but we do know we’ll be in a very constrained financial environment.”
“We obviously want to protect services as much as possible, and .. the last thing we want is to reduce services, but we are going to be inevitably confronted with some really challenging decisions,
“I can’t really say at this stage what we would specifically do to meet these challenges, but we have had to meet significant challenges already, not as significant as this, but we’ve had to deal with really tough savings targets.
“We can’t run away from difficult decisions.
Graham Ebers, the council’s chief financial officer, told Wokingham Today that he believes the situation facing Wokingham is “.. unprecedented”.
He added: “Based on many indicators, we are a well-run organisation. We are in as a decent financial state given we do have pressures, like every other council at our level,
“We have a responsible level of reserves that will help us not to panic, and help us make better choices and find better solutions rather than knee-jerk ones.”
He added his belief that the problem is based on “.. a very complex formula that is almost trying to do the impossible, which is to work out the real cost of running each local authority in the country.
“It can only ever be a very, very blunt instrument. And people will have different views on what goes into that formula.
Conway added: “We understand the government’s desire to redistribute funding, but the way they are proposing to do it is very damaging.
As a solution, he said:“We are proposing a simple fix, which is that the government sets a ‘floor’ – a minimum annual funding increase – that all councils receive regardless of the formula.
“This has been done in the past because local authority funding is so complex that no single formula for working out who should get what is perfect. There needs to be a level of protection.
“We calculate that a 4% floor increase would protect the worst hit councils (over 50 councils) without stopping the government achieving its desired redistribution.”
A spokesperson for Wokingham borough council said that to give a sense of scale, the £47 million cumulative loss over the proposed three-year settlement is equivalent to nearly eight years’ worth of the council’s annual spend on waste collection, which is around £6 million per year.”
Clive Jones, MP for Wokingham, said he has been calling for fairer funding for local councils, due to the fact it is difficult for them to plan ahead.
He told Wokingham Today: “The three-year settlement is welcome, but certainly not one where we are losing a significant amount. This isn’t what we expected.
“I met Jim McMahon, the minister of state for local government and English devolution, as long ago as January, and I will continue to make the case for Wokingham to receive fairer and better funding, something that’s been lacking for more than 15 years.”
Yuan Yang, MP for Woodley and Early, added: “I have and will continue to raise the concerns of my constituents to government ministers to make sure we are properly funding local services.
“Last week I made representations to Angela Rayner, the deputy prime minister, about what we can do to best support residents.
“Councils across the country have had their funding slashed by 26% in real terms after 14 years of Conservative austerity.
“It is vitally important we support councils to build back in a way that is both fair and financially sustainable. That’s why the government has committed to providing a three-year funding settlement, so that councils know what they’re getting and when.”
Conway concluded: “We are ‘preparing for the worst, but we are working to achieve the best outcome we can.”
Reacting to the news, Cllr Pauline Jorgensen, leader of the Conservative group at Wokingham borough council, told Wokingham Today: “This settlement is an outrageous tax bombshell for working people in Wokingham Borough from this dreadful Labour government.
“Labour’s proposed settlement means that £50 million of Wokingham Borough taxpayers’ money will be taken by the government and redistributed to other councils, often Labour controlled councils.
“For every additional £100 of Council Tax hard-working residents pay, £78 will be taken from us by this government and used to fund services elsewhere in the country.
“This unprecedented move turns council tax from a charge for local services to a wealth tax, threatening to strip our residents of much-needed services.”
Wokingham Borough Council will submit its response to the Fairer Funding Review 2.0 consultation shortly, and will continue to call for mitigation as well as preparing for the impact of any further real-term funding reductions.
