The council is battling the most challenging financial circumstances in its history as Central Government continues to massively reduce the grant funding it provides to the city.
Councillor Roger Lawrence, Leader of Wolverhampton City Council, today described the budget proposals as "painful" but vowed that the authority would manage the difficult circumstances being forced upon it.
He warned that no area of the council would be left untouched by the cuts - with services scaled back - in some cases stopped altogether - and up to 2000 job losses at the authority.
As well as the programme of savings, the cabinet will be asked to support a Council Tax rise of 1.99% and the use of £11.8 million of reserves so that a balanced budget can be set in 2014/2015.
Increasing the council element of Council Tax by 1.99% would be the first rise in the city for 4 years. The vast majority of properties in the city fall within the cheapest bands A and B and for them the proposed rise would equate to a monthly increase in bills of £1.46 and £1.70 respectively.
The council warned last month that it would have to take radical action to ensure it could set a legal budget in the face of ongoing Government cuts.
The money provided to Wolverhampton by Government will have reduced by £147 million in real terms - which is more than half (52%) - over 4 years if Whitehall goes ahead with its intended spending plans.
Losing such a huge proportion of its main source of income has given the council no choice but to put forward 205 savings proposals over the next 5 years totalling £66.7 million, with a further £59 million still to be identified.
The council consulted on Type=articles;Articleid=3451;Title=165 savings proposals; that it announced last October and has responded to the consultation. The main points from this can be found in Appendix 1 below.
Type=articles;Articleid=3451;Title=40 new savings proposals; will form part of the budget, the most high profile of which are included in Appendix 2 below.
Details of how staff will be affected - with potentially up to 2000 job losses and proposed significant changes to terms and conditions of employment - can be found in Appendix 3 below.
Councillor Lawrence said: "I would like to place on record my thanks to everyone who took part in the budget consultation and pay tribute to the serious and constructive approach adopted. Particular thanks must also go to those who said they would be prepared to step in and help us with this crisis by volunteering or working with us to find alternative ways of saving money to prevent service cuts.
"We've made no secret of our financial position and these budget proposals are a direct result of the savage cuts Central Government is making to our budget.
"No organisation or individual could sustain losing half of their income without having to radically reduce spending. We are no different - but when a council reduces its spending that means services people value get cut and jobs are lost.
"It is painful and difficult, but it is unfortunately necessary. We will manage through these difficult circumstances, we have no choice but to take these measures in order to produce a legal and balanced budget."
"More job losses are hugely regrettable, not just for the individuals who face losing their livelihoods but also for the city because many of these people live here and spend their money here.
"Proposing such radical changes to terms and conditions (*see appendix 3) of employment are also something we would rather not have to do, but we have little choice with the sums of money we need to save."
Despite the financial challenges, the council will continue to focus on its corporate priorities:
- encouraging enterprise and business
- empowering people and communities
- reinvigorating the city
- creating a confident capable council.
The council will build on its proven track record of bringing in investment to the city (as demonstrated by Jaguar Land Rover choosing i54 to build a state of the art new engine plant).
It will also manage demand for core services by using early intervention to help families in trouble to live unsupported, independent lives.
Councillor Lawrence said: "Wolverhampton is not alone in feeling the pressure. In a recent survey, 37% of the councils asked said that they were at risk of being unable to fulfil their statutory duties because of grant reductions.
"That will not happen here. We will not only meet our legal obligations, but use whatever resources we have to deliver the best outcomes we can for the people of Wolverhampton."
Cabinet will meet to agree the budget proposals on 25 February and recommend them for approval at a meeting of the Full Council which takes place in the Council Chamber on 5 March.
Appendix 1 - Response to Savings Proposals Already Announced
165 of the savings proposals contained in the budget report that will go to next week's Cabinet meeting were announced last October and consulted on with the public, key stakeholders and scrutinised by councillors.
During the consultation, the council made it clear that there was very little room to manoeuvre because the need to make savings was so great and more would need to follow.
The cabinet has responded to the views expressed in the consultation - the most high profile of which are outlined here:
Neighbourhood Wardens: Concerns were raised about plans to halve the number of neighbourhood wardens in the city. While the council has no choice but to substantially reduce the budget for this service, it will reinstate 3 of the warden posts that would otherwise have been lost. This has happened as a direct result of public feedback. This will mean there will be 18 wardens patrolling the streets of Wolverhampton.
Central Baths: One of the most contentious proposals announced last year was the withdrawal of the £316,000 subsidy it currently costs the council to run Central Baths. Fears were expressed that the baths would be forced to close without the subsidy. However, considerable work is now being carried out by the council to run the baths and the council's 2 other leisure centres commercially. The leisure centres are under a new management structure and a new business model is being developed which will be presented next month. The council is working with Sport England and the Amateur Swimming Association. The focus of this work is to increase usage and maximise revenues at all three leisure centres and reduce the subsidy they currently receive.
Bantock House and other cultural services: There has been considerable media coverage regarding the proposal to change the way Bantock House Museum is run. Some alarmist and inaccurate stories have claimed that the facility will close. The Cabinet acknowledges the importance of Bantock House, the city's art gallery, archives and Bilston Craft Gallery to the city and there is no plan to close any of them. On the contrary, Cabinet wants them to be run commercially to maximise revenues and reduce the council subsidy they currently rely on. New business models are being developed to achieve this and where appropriate the council will work with partner agencies.
Youth Services: The Cabinet is extremely sympathetic to the concerns expressed regarding the closure of open access youth clubs and facilities. A sum of money will be made available so that some facilities can continue to be provided by the voluntary and community sectors. The council will also continue to provide targeted youth work within communities.
Libraries: People were concerned about plans to reduce community library opening hours and introduce charging for internet use. Work is being carried out to develop a network of volunteers to support community libraries which could see an extension to their opening hours. It has also been noted that where libraries are moving into community hub buildings, they will in many cases continue to be open for book borrowing and computer use even when library staff are not present.
Reduction to Voluntary Sector Grants: Even with the proposed cuts in grants to voluntary sector groups, council funding to the voluntary sector remains considerable. Where possible these changes are being made in a way that minimises the loss of other external sources of external funding to the groups.
Appendix 2 - New Savings Proposals
Forty new savings proposals have been announced due to the worse than expected financial settlement for future years from Central Government and they will be subject to consultation as appropriate.
The new proposals likely to have the biggest impact include:
- introducing camera enforcement of motorists driving illegally in the city's bus lanes and bus gates. Any surplus income from this scheme will be invested back into highways improvements
- further reducing the council's outdoor events programme to 1 or 2 events per year and attempt to attract sponsorship. It would mean that expensive existing events would either be stopped or significantly scaled back. The council's outdoor events team will start to sell event management services
- further amend the Council Tax Reduction Scheme (which replaced Council Tax Benefit) meaning eligible people will have to pay more towards their Council Tax bills
- a review of the existing graffiti removal service will be carried out with a view to halving the subsidy the council currently pays to the service. This is likely to see charges introduced to the private sector for graffiti removal which currently gets it for free
All of the new proposals will be published on the council website at 12pm today.
Appendix 3 - Impact on Council Staff
One of the main areas where savings will be made will be a further reduction in the number of jobs at the council as well as changes to the terms and conditions of the staff that continue to work for the authority.
Since 2010, staff numbers have reduced by in excess of 600 posts and it is anticipated that there will be a further 1,500 jobs to go by 2015 as the result of the savings announced today. Staff have been warned that this figure could rise to closer to 2,000 jobs.
The budget report going to Cabinet next week also recommends changing terms and conditions of employment which will save an estimated £5.8 million and will be subject to negotiations with trade unions and further decisions by councillors. Subject to those negotiations, these are likely to include:
- temporarily reducing full time contracts from 37 hours per week to 35 hours per week
- temporarily freezing annual pay increments for all staff
- not paying staff for the first day of any sickness absence
- flexi leave, where staff are able to take time off for hours they build up above their contracted time, will stop.
- employees who use their cars for council business purposes would see their mileage rates reduced from 45p a mile to 25p a mile.
- all employees' contracts would change to a '5 out of 7' arrangement. This means that all employees could be asked to work a pattern which includes weekends. There would be no additional payments for weekend working
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- released: Tuesday 18 February, 2014