Telford & Wrekin Council warns of council tax rise and 'challenging cuts' ahead as it seeks to plug funding gap

Telford & Wrekin councillors are set to consider the authority's medium term financial strategy for the next four years at their cabinet meeting on January 6.

The report, which will be presented to the cabinet, states that the council has delivered £181.7m of savings since the introduction of austerity policies by the Conservative/Liberal Democrat government in 2010.

It reads: "The severe financial constraints applied by the government to local authorities during the prolonged period of austerity has resulted in increasing numbers of councils in other parts of the country having to issue 'section 114 notices' and take extreme measures to restore financial stability.

"Locally, in the face of increasing demands for key services at the same time as we have been subject to cuts in our funding from government, the council has exercised very active budget management and financial control by cabinet members and officers across the council.

"The council has demonstrated a consistently strong track record of sound financial management for over 16 years despite having to deliver £181.7m ongoing annual budget savings by the end of 2024/25."

Despite this, the authority states that adult social care and children's safeguarding services in particular have faced "significant additional pressures", including an "extremely disappointing" Autumn Statement in 2023, interest rates remaining high and a population surge in the borough.

In the decade to 2023, the borough saw a population increase of 13.5 per cent - the highest of all West Midlands upper-tier local authorities and the ninth largest population growth of all 151 upper-tier local authorities in England. 

In the same period, the population of those aged 65 and up increased by 28.5 per cent - the highest increase of all West Midlands upper-tier local authorities and the third highest of all 151 upper tier authorities in England. 

"After having delivered £181.7m of annual ongoing savings by the end of this year, it is clear that further cuts will be more challenging," the report reads.

"Savings are now more challenging as the 'easier savings' have already been taken."

In order to help make the savings, the council is planning a 2.99 per cent increase to council tax, plus a 2 per cent increase to the adult social care precept. 

According to the report, this will mean an increase of £1.15 per week for an average Band B property.

Despite the increase, Telford & Wrekin Council said it is likely that the authority will still have the lowest council tax in the Midlands for the services that it provides - and one of the lowest of any unitary authority in the country.

It also said that all the extra funding generated by both increases will be invested for the provision of social care services - which is currently costing the authority 75p of every £1 spent.

Financial projections suggest that without the hike in council tax, it will be facing a £17.5m funding gap in the next financial year. 

It's forecast that the council tax rise will generate around £4.4m - leaving £13m worth of savings to find.

Over the next four years, the council predicts the funding gap will widen, leaving it with a funding gap of as much as £34.4m in 2028/29.

A consultation period on the proposals included in the report will run from January 7 through to February 5. The Business & Finance Scrutiny Committee will scrutinise the administration’s budget proposals and any alternative budget proposals put forward by the opposition group.

The cabinet will then agree final recommendations to full council at a meeting to be held on February 13, with final decisions on the budget and council tax for 2025/26 to be taken at a full council meeting on February 27.