WORCESTERSHIRE County Council has been forced to defend itself against allegations it did not reveal the true extent of its financial troubles, writes Anu Shukla.
The authority’s finance chiefs spent £30,000 of taxpayers’ money on a review of its finances, carried out by the Chartered Institute of Public Finance Accounting (CIPFA) which, published in June 2017, revealed Worcestershire County Council had bigger financial problems than had been suggested previously.
CIPFA projected a £26.4million blackhole for 2018/19, rising to £60.1million by 2020/21, but the ‘negative’ findings of the Financial Resilience Review only came to light after a Freedom Of Information request submitted by the Bureau of Investigative Journalism.
Former chief finance director Sean Pearce commissioned the CIPFA report for Leader of the Council and cabinet member with responsibility for finance Simon Geraghty.
It stated the authority aimed to make target savings of £21.3million – but was already in the red by £10.2million.
Meanwhile the authority’s own budget report for 2017/18 revealed the County Council had already overspent its budget by £7.2million.
Figures seen by the Bureau and the Standard show the council has been feeling the pressure for several years.
These showed the council had dipped into almost half of its ‘rainy day fund’, using up 47.1 per cent of usable reserves between 2013/14 and 2017/18.
CIPFA said the council was not only ‘over-optimistic’ about its current finances, but there was a lack of urgency in its response to current challenges.
Shadow cabinet leader Peter McDonald told The Standard he had no idea the CIPFA report even existed until now.
“It’s absolutely disgraceful. We have a controlling group and leader, who, when it comes to finances, buried their heads in the sand.
“I sincerely believe within two years the Government will be sending the commissioners in to run the council.
“You can’t shave anymore meat off the bone because it means whatever services we’ve got left will collapse.”
CIPFA said the council’s medium term financial plan was ‘not currently sound’ and the demand for services was ‘untypically high’ at 2.5 times the growth in resources.
The review advised the council to make a radical overhaul of its savings programme and ‘urgently consider short-term initiatives’ like a ‘targeted staffing freeze’.
It also recommended ‘a sense of urgency appropriate to the real challenge’.
However analysis of Cabinet documents show much of CIPFA’s advice was ignored, that there was no mention of the report and no recommendations made in the minutes of council meetings.
A Worcestershire County Council spokesperson told the Standard: “Feedback was received in a presentation to an internal meeting of Cabinet and Strategic Leadership Team.
“The approach taken by the council was in line with the CIPFA advice and also helped us to shape how we moved forward with our medium term financial plan.
“We listened to the professional advice from CIPFA and increased our assumptions around council tax rates.”
They added the emerging financial pressured during 2017/18 with regard to children and adult social care were reviewed in detail and led the council to invest ‘£10.5million into children’s social care and £7.8million into adult social care for 2018/19.
“The review also supported a refresh of our transformation plans and longer term investment into children’s services, both of which were included in the medium term financial plan.
“Despite the budgetary pressures, we are in a robust financial position and a balanced budget for 2018/19 was approved by councillors in February 2018.”
The council declined to give a reason why it had not made public CIPFA’s full findings.
Chair of the council’s scrutiny committee Coun Chris Bloore said he was shocked and disappointed to hear the ‘perilous financial situation’ reported by CIPFA had not been shared with members.
“Members are being asked to take serious financial decisions on what we now know was incomplete information.
“I will be asking questions of the council’s political and senior officer leadership team over why members were denied this information.”