It may seem an odd headline but there are still residents (and even Labour MPs) who six years on, don’t know that since May 2019, all decisions in Cheshire East Council, including recent decisions about the budget, have and are being made by the Labour Group in coalition with an affiliated Group of “Independent” Councillors.
The Conservatives may be the largest group on the Council with 33 members (out of 81) but have “no overall control” and are the main Opposition Group on Cheshire East Council.
The Labour-Independent Coalition formed a majority Administration, initially under the leadership of Sam Corcoran (Labour: Sandbach Heath & East) and Craig Browne (Independent: Alderley Edge).
Since May 2019 the Labour/Independent administration has;
introduced a Committee System model of governance that has been criticised by the LGA Peer Report for its “silo working”, “inadequate systems for scrutiny”, poor reporting mechanisms” and “delayed and inefficient decision-making”.
Overseen what was a £1.6m inherited surplus in the High Special Needs Grant reserve (DSG) in 2019 to a £110m deficit reserve (debt) in 2024/25.
Delivered a much-lauded ‘balanced’ 4-year MTFS Budget in February 2024 - that was wildly in deficit before the end of the first quarter in July 2024.
Received a damning Local Government Peer Review Challenge Report in March 2024
Received an “INADEQUATE’ grading for its Ofsted Childrens Services in March 2024, (“Inadequate” in one area. “Requires Improvement” in all other areas”).
Overseen a predicted shortfall in the 2024/25 budget of £18m that will have to be met by ESF Borrowing (Exceptional Financial Support) , with all associated repayment and interest costs over the next 20 years.
(It is of note that Cllr Craig Browne resigned at the 2024 budget meeting (ostensibly as he had a new job) and Cllr Corcoran resigned at full Council in July 2024 prior to the vote-of-no-Confidence in his leadership.)
Since then, the coalition has been operating under a new Labour Leader, Nick Mannion (Macclesfield West & Ivy) and Independent Deputy Leader, Michael Gorman (Wilmslow
Hope that’s cleared up that (rather significant) confusion!
So what’s been happening since?
It is not encouraging reading. All Local Authorities are experiencing pressures on rising social care demands (adults and children), rising costs and simply put, the increased complexity of peoples’ physical, mental and social care needs.
However, over the past six years, CEC has become a “National Outlier” in many of these areas and in order to try and balance its budgets over the next four years, the Government (both the past Conservative and current Labour Governments) have required CEC to submit a credible “Transformation Plan” (reporting to the Ministry of Housing, Communities and Local Government - MHCLG) - This was submitted to MHCLG in August 2024.
This must operate in parallel with an Ofsted Improvement Plan (reporting to the Department of Education)
AND an Assurance Programme to the Local Government Association (LGA).
So what about the money?
A)
Exceptional Financial Support
It must be remembered that CEC money and Government Money is always PUBLIC money - ie YOUR money.
Cllr Janet Clowes (Conservative Group Leader: Opposition) was invited as a guest on BBC Politics North West earlier today to discuss recent decisions by the Labour/Independent administration requesting Government permission to raise Extraordinary Financial Support and an “Excessive Council Tax” rise.
The following information is already in the public domain and the draft budget will be published next week.
9th January 2025; CEC requested Government permission to draw down £17.6m in EFS to off-set the 2024/25 budget short-fall.
10th January 2025: CEC requested Government permission to draw down further EFS (£25.3m in 2025/26 AND £21.3M in 2026/27)
It’s important to remember what EFS is (and is not!)
It is not new money. It is not free money from Government.
EFS must be raised by Councils through; borrowing (plus interest), the sale of assets (capital receipts) or by raising the council tax levy.
Exceptional Financial Support and “Excessive Council Tax Rises”
Current legislation states that Councils may only raise Council Tax above the maximum of 4.99% subject to public referendum HOWEVER Councils in receipt of ESF may now (since 18th December 2024) request permission from Government to raise Council Tax above the threshold, to meet EFS requirements WITHOUT a Public Referendum.
With this in mind, CEC, via an Urgent Decision Process, has also requested of Government, the flexibility to raise Council Tax by an additional “excessive council tax rise” of 5%. (If implemented, this would be a 9.99% Council Tax rise in 2025/26.
The extra 5% will raise approximately £15m (year on year) but clearly, will not meet the current predicted short-falls over the next two years in full. Further borrowing and/or capital receipts will still be required unless further cuts or efficiencies are made.
What about the next 2025/26 Budget?
The Budget Consultation ended in mid-January 2025 and will be presented to Corporate Policy Committee on 6th February for recommendation to full Council on 26th February.
This will include cuts/changes to statutory and non-statutory council services that are designed to further support savings and cost-efficiencies.
All councils are legally required to submit a balanced budget by the end of February.
If a balanced budget cannot be agreed at Budget Council, the S151 (Finance & Resources) Officer must submit an S114 Notice to Government (the LA equivalent to bankruptcy).
In this context Government will send operatives to examine all areas of Council Business and have executive powers to implement whatever measures are deemed necessary to deliver a legally, balanced budget.
All Cheshire East elected members will have to examine the proposed MTFS Budget (2025/26 —> ) at a meeting of full Council at Tenants Hall, Tatton Park, Knutsford on February 26th 2025.
Both the Budget and the setting of the Council Tax will be named and recorded votes.
If you require further information, please click on the links below:
References:
https://files.ofsted.gov.uk/v1/file/50247203
https://moderngov.cheshireeast.gov.uk/ecminutes/ieListDocuments.aspx?CId=965&MId=10324&Ver=4
