The severity of Kirklees Council’s financial position is becoming increasingly clear with the situation expected to get worse before it gets better, according to a council report.
On Wednesday (6 September), cabinet will consider the Medium Term Financial Plan (MTFP), which sets out the principles that the organisation will use to guide its financial decision-making over the coming months. The strategy aims to ensure the council balances its budget, remains financially stable over the next five years and best prioritises its spending.
The report outlines how the council needs to make £47.8m in savings before it sets its budget next year. Increasingly severe money-saving measures are already being implemented including freezing recruitment and all non-essential spending, making 250 members of the council’s workforce redundant between October and March, and the acceleration of the sale of assets the council was already looking to dispose of.
In addition to this, the council is undertaking a review of its capital programme which includes major regeneration projects such as the Huddersfield and Dewsbury Blueprint and George Hotel. The report states that the council will have to “delay, defer, stop or not start some projects” but doesn’t detail which will be affected.
However, despite these measures, the council forecasts that its funding shortfall will increase in the coming financial years, with this estimated to peak at £61.1m in 2026/27.
In the previous financial year, the local authority also faced a challenging financial situation, ending the year with a £43m budget gap. In this instance, the council was able to use £25m of reserves to lessen the damage but going forward, the council is unable to fall back on reserves as these one-off funds have dried up. The report states that there is “no scope to use reserves” when planning the budget for the financial year 2024/25.
With reserves no longer an option, the MTFP details the three key ways the council will manage its finances going forward. First, by growing the Kirklees economy. That means delivering new housing and making sure its infrastructure attracts further investment and working with partners in sectors to make the most of the borough’s economic potential. A thriving economy brings revenue to the council and protects residents from future economic shocks.
The second strand means the council will find more efficient ways of delivering services to residents and modernising the way it operates. That will mean cutting the cost of services by reducing management and administration costs as well as reviewing the scope of services the council offers. It will also mean recovering a greater proportion of the costs of some services which are currently subsidised and making sure the authority uses technology and its assets in the most efficient ways possible.
The third part of the plan describes how the council will prioritise its funding towards people, families and organisations that need its services the most and where they can have the most impact. This involves focusing on prevention and early intervention as well as targeting services more effectively.
The council’s financial troubles have been attributed to a number of factors including the cost of living crisis, with increased pressures on energy, pay, goods and services. In addition, there has been increasing demand on services like social care for older residents and costs for children and young people who need extra support.
Cabinet Member for Finance and Regeneration, Cllr Graham Turner, said: “Every day, we’re hearing stories about councils facing significant financial pressures. It’s not just a local issue, it’s regional and national. In Kirklees, we’ve been open about our finances and how the cost-of-living crisis and our longstanding under-funding has given us particular challenges this year.
“But this financial plan shows we’re facing up to the challenge. Over the past few months, we’ve taken urgent action to address the immediate financial issues and this updated strategy will build on that work to safeguard the financial future of the council, which is key to delivering all our services. Growing our economy, making efficiencies and prioritising spending will be key to overcoming the pressures we face and setting the council on a firm financial footing.
“There are tough decisions to come. But we will continue to be open with residents and keep putting pressure on government to give Kirklees residents the fair deal on funding they deserve.”