City of Wolverhampton Council’s finance chief says the authority anticipates being able to set a balanced budget for 2021-2022 without any need to make significant cuts to services but has warned that council tax will have to increase.

Councillor Louise Miles, cabinet member for resources, said that after receiving details of the funding settlement from central government, the council was consulting on a proposal to increase council tax by 1.99% and, as expected by Government, levy an additional 3% to pay for adult social care.

The consultation with residents and businesses will take place before the budget is finalised in March.

A financial update, going before the council’s cabinet next Wednesday (20 January), says that it should be possible to balance the books without significantly cutting essential services next year, but only by raising council tax and imposing the 3% adult social care levy.

It also warns that while government grants will cover the immediate costs of dealing with the pandemic emergency, there is uncertainty over how the council will fund the longer term economic consequences of Covid which are likely to be felt for years to come.

Councillor Miles said: “We have been told by Government what we can expect to receive for the coming financial year and we welcome the fact they are providing the money to pay for the immediate, emergency phase of the pandemic.

“Work is ongoing to prepare next year’s budget and the detail will be shared in February, but based on current information we are confident we will be able to set a balanced budget without needing to significantly cut the services our communities rely on.

“However, this will only be possible by increasing council tax and imposing the levy to pay for adult social care which Government has told all councils it expects them to do and has factored this into their funding formula, thus passing the burden onto local residents.

“We’re consulting on our budgetary position over the coming weeks and continuing the dialogue we’ve been having with our residents, businesses and other stakeholders to set our priorities for the city.

“What councils require is greater certainly over future years’ funding to be able to take longer term decisions and plan ahead. We need central government not to take a short term view of council funding, but to provide clarity over the future and fund us properly so that council tax does not have to keep going up every year to pay for essential services.

“We also urgently need a national solution to the adult social care crisis which all parties acknowledge is a huge problem. The pandemic has shone a spotlight on the amazing work our carers provide and this sector needs to be funded properly at a national level rather than expecting councils to pass on the costs to local taxpayers."