Next Thursday, the Finance Sub-Committee (FSC) must examine the dire state of Cheshire East’s finances, consider how to avoid a Section 114 Notice and how CEC can best bring prepare a legal, balanced budget in time for February’s Budget Council meeting.
Despite receiving an additional £6.1m government grants, and assuming all ‘Council-wide Transformation Savings” can be achieved, there is still a shortfall of £25.3m over 2025/26 (and a further projected shortfall of £21.3m in 2026/27.)
It is therefore not surprising to see that one recommendation next Thursday, is that CEC finally draws down the £17.3m Exceptional Financial Support (EFS) requested from Government in 2024/25 to help cover some (but not all) of the revenue budget shortfall.
But beware! This EFS does not address the High Needs (SEND) deficit reserve of over £90m and Appendix D is worthy of further special attention.
CEC has already requested UP TO £35m EFS for 2025/26 with possibly another £20+m in 2026/27 if required (See December 2024 Council papers). This is not ‘free’ money but a loan that will incur significant interest payments over lengthy repayment periods.
The Committee is therefore asked to consider an alternative set of scenarios where Council Tax is raised to levels that exceed the current limit of 4.99%.
The simplistic explanation offered is that CE Council Tax levels are lower than other similar authorities and so raising them to match is justified. (There’s also a ‘helpful graph’ showing how much more money CEC would have today if the Conservative administration had not frozen council tax in the early years of the Unitary Authority)! It’s a neat and plausible excuse but does not bear scrutiny.
Many older residents will recall Gordon Brown’s cutting of revenue support grant for Councils prior to the 2010 election, whilst Eric Pickles honoured the election pledge to freeze Council Tax for up to 5 years, to help control rampant council tax hikes under the previous Labour Government and requiring a public referendum if Councils felt such rises were necessary.
Whilst not sustainable in the long-term, it offered some respite for residents at the time with Council Taxes rising again from 2015 (but not exceeding the 4.99% levels that would trigger a referendum).
So there we have it, next Thursday, Councillors will be asked to consider (on top of all the other savings, cuts and rising charges) which is preferable; the burden of long-term EFS borrowing OR the up-front pressures of hiking Council Tax levels above the current 4.99% limit this year and maybe next year as well. Only one thing is for certain, whichever way forward is chosen, Cheshire East Residents will be paying the price of the current Labour-Independent Administration’s financial incompetence for a very long time to come.
Cllr Janet Clowes
Conservative Group Leader (Opposition)
Cheshire East Council.
REFERENCES
https://moderngov.cheshireeast.gov.uk/ecminutes/ieListDocuments.aspx?CId=965&MId=10324&Ver=4
