Cabinet received an update on Wednesday 17 November 2021 on the Council’s mid-year revenue budget which confirmed that COVID-19 was continuing to have a major influence on the Council’s budget. At the mid-year stage, it is expected that Council services will have faced total costs and lost income of £55m since the start of the COVID-19 pandemic in March 2020. The Council expects to manage this financial impact within the Government’s COVID-19 funding allocations.
Whilst there is an overall forecast surplus of £0.505m, a number of factors have been identified that may impact on this forecast for the remainder of the financial year including increased costs for Looked After Children complex placements, increased spend for home to school transport due to an increase in demand and costs for this service, and unfilled vacancies (predominantly in Adult and Children’s Social Care) which are impacting on agency staff costs. Work is underway through the Council’s Workforce Sufficiency Plan to address capacity issues.
In terms of future years’ budgets, we will have to await the Local Government Grant Settlement which is due later in December. This will set out the funding for 2022/23 and potentially the next three years. The big question is whether funding will be allocated based on need (which Knowsley has continually lobbied for) rather than postcode?
In addition, the Council will need to review how its plans for the development of Huyton Village Centre can be delivered given the Government has once again rejected a funding bid to support this pivotal improvement scheme. Despite the Government identifying Knowsley as a Priority 1 area for its Levelling Up Fund, the Council’s bid to support the development of Huyton Village Centre was unsuccessful, whilst other more affluent Priority 2 and 3 areas had their funding bids (some had 3 bids) approved.
Cllr Jayne Aston, Cabinet Member for Resources, said: “Given the immense challenges being faced by the Council, I’m incredibly proud of the positive financial position we have reported today. This doesn’t happen by chance and it’s thanks to our strong financial management and robust decision making that we have effectively managed our budget.
“The Government certainly hasn’t made it easy for us. Not only have they cut Knowsley’s budget more than any other area, but their claims that Government funding will increase is said with very little substance. They aren’t factoring in inflation at 4%, the fact that we need to fund Adult Social Care reforms, fund the National Minimum Wage and public pay sector awards – all announcements they made as part of the Government Spending Review, but actually not providing the funding to implement them. These are all costs that the Council will need to pick up and factor into our budget.
“The Government talk a lot about their Levelling Up agenda, but areas most in need are yet again overlooked. How can this be levelling up? The Chancellor has allocated £1.7bn to 105 Levelling Up projects and despite Knowsley being classified as a top priority area by the Government and feedback on our bid for the development of Huyton being positive, our bid was unsuccessful.
“I’m really not sure what we need to do to secure Government funding but yet again, the Council will have to step in and use our own resources to deliver the improvements that our communities need and deserve.”
The Council’s medium-term financial forecast will be presented at Cabinet on 8 December 2021.