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Councils facing cash meltdown
11:50am Saturday 2nd February 2013 in Local
SMALL councils face becoming unsustainable if ongoing cuts to their funding continue, according to a new report.
Grant Thornton’s recent document into the status of local government finances, called Towards a Tipping Point? says there are fears for the future of town halls.
It comes as both Redditch and Bromsgrove councils need to find extra cash because of continuous funding reductions.
The councils originally faced a budget gap of £1m each due to grant reductions.
Redditch Council had already identified £750,000 of this from savings, leaving £250,000 still to find.
However, it has since been given the final figures for the new settlement from the government and it leaves Redditch with a further £150,000 cut – meaning it needs to save £400,000 by 2015.
In Bromsgrove it’s a similar story. The council had managed to find £800,000 of the £1m but following the new settlement news it has £30,000 extra to find – so a total of £230,000 is needed by 2015.
It is expected there will be a number of job cuts, but at the time of going to press it is unsure exactly how many.
A council spokesman for both Redditch and Bromsgrove said that staff have been invited to request voluntary redundancy.
They said: “We are committed to making savings from transforming our services and driving out waste which will mean an improvement to services for our customers with the aim of limiting the numbers of deleted posts.
“We are in stronger position thanks to our shared services project and continue to look for savings through business transformation which looks to improve our services to customers rather than cut them.”
The report says there is the possibility of smaller councils becoming “unsustainable”, and that tougher times are ahead unless the economy picks up.
It also says there are concerns about “strategic financial planning”, suggesting councils are struggling to balance the books and focus on delivering services.