The Government may have to give West Berkshire Council more cash to stop it going bankrupt.
The Government may need to provide West Berkshire Council with additional funding to avoid bankruptcy, as the council is now facing a £6.8 million deficit that puts its finances in a precarious position.
Financial assessments reveal that council funds are ‘weakening quarter by quarter’. Consequently, the bankruptcy officer is taking over spending authority through a spending review board, effectively halting all non-essential expenditure.
A proposal for a spending review panel alongside a Financial Review Panel has been introduced, indicating that all discretionary spending will end. This includes cuts to training, travel, and off-site meetings.
While there isn’t any planned reduction of services yet, any request for further emergency government funding might lead to potential staff restructuring. The Council, like many others, has a complex management structure that could be subject to scrutiny.
Council leader Jeff Brooks (Lib Dem, Thatcham West) has downplayed the concern, stating there’s ‘no reason for panic’, but is likely preparing for criticism at the upcoming executive meeting where the financial situation will be discussed.
The council’s General Fund Reserve stands at just over £10 million, built up with prior government support. However, the latest forecast will deplete this reserve by £6.8 million, dropping it below sustainable levels.
Council officers responsible for adult and children’s services are set for tough questioning after shocking financial discrepancies emerged for the previous quarter, where debt surged from around £800,000 to £6.8 million.
In a meeting next week, Liberal Democrats will demand explanations for a 40% increase in children’s services costs and 20% for adult care over three years. Increased commissioning costs, such as the national living wage and inflation, are primarily to blame, not the UK’s declining inflation rate.
Costs for placing children into care have skyrocketed from £11.4 million to £21.4 million in just three years. Paul Coe, leading adult social care, attributes rising costs to new care packages rather than an increase in recipients.
Currently, two children in care are costing the council £1 million each annually. Anne Marie Dodds, head of children's services, faced scrutiny despite her team’s recent ‘Good’ Ofsted rating, as placement and legal costs have surged due to the complexity of cases.
A report highlights that the council spends over £13 million a year on the 25 most expensive child placements, constituting 7% of the total council budget—an increase of 165% since 2019-20.
New council CEO Joseph Holmes now faces the challenge of managing these financial oversights, while also addressing questions from Lib Dem finance lead Iain Cottingham, who brings significant corporate finance experience to the table.
Niki Hinman, Local Democracy Reporter
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