Trafford Council's finance leads have not ruled out relying on 'exceptional financial support' (EFS) to balance its budget for the coming year, despite ambitions to 'neutralise' that requirement.
The authority is again facing a difficult budget position for 2027/28. Without action, the gap between income and outgoings is expected to reach around £60m over the next three years, with the majority of that pressure – £38m – landing next year.
Cash troubles have already seen the council seek special dispensation from the Government, known as EFS, two years in a row to balance its books – something it is legally required to do. This resulted in residents facing two years of 7.49pc tax rises, with the council also borrowing millions of pounds to stay afloat.
Budget papers and proposed measures
Budget papers released last week suggested the authority was not looking for a repeat of those measures this year. The proposed council tax rise was set at the referendum limit of 4.99pc, and documents stated the priority of those setting the budget was to 'eliminate the requirement for EFS' next year.
However, officers did not seem entirely certain that would be achievable when questioned by opposition members this week. A number of so-called 'smoothing' measures have been suggested to reduce next year's budget gap.
These include flexible use of capital receipts, reviewing management of so-called 'bad debt' – money owed to the council such as unpaid council tax that is not considered collectible – and looking at debt restructuring for the money the council itself owes. This approach will not remove financial pressures over the longer term, but the council hopes they will allow enough time for service transformation and other saving measures to be fully implemented, with an additional £7.5m on offer from the Government to help deliver these.
However, a gap of around £8.4m still remains, with those in charge saying work on this will continue between now and when the budget is approved in February.
Officers' response to opposition questions
At a meeting of the council's cabinet this week, Conservative leader of the opposition Nathan Evans and Trafford's Green Party leader Geraldine Coggins both asked about the possibility of EFS next year.
Responding to Coun Evans, chief finance officer Graeme Bentley said: “I can't say that EFS is not an option. All I can say is, the ambition is to minimise and neutralise any requirement for EFS and I think it will be best endeavours to get us to where we can get to.
“But there are risks. There's risks around where we are with the budget position for in-year, and we continue to look at that. So, a difficult question [...]
“As an administration, we're continuing to work on proposals and transformation programmes that will help, hopefully, bring that to zero. And it is our absolute aspiration that we don't have to access EFS this year.”
Remaining risks and funding pressures
A number of factors still remain that could change the budget position for better or for worse. One is the October Budget next week, with authorities not yet sure if there will be any new announcements when it comes to council funding.
Trafford is also expected to finalise next month an 'in-depth diagnostic' report into its children's services following a highly critical Ofsted report. Any additional service funding identified as necessary through that has not yet been factored into next year's budget.
The ruling Labour administration has previously blamed its tricky financial situation in part on a lower than expected cash settlement from the Government which increased its funding gap by around £24m last year.
Lead member for finance Joanne Harding told councillors on Monday (October 19) the 'reality is Trafford continues to face a significant funding gap'.
She said: “This is not because the council has been reckless with taxpayers' money or being financially irresponsible, as I'm sure some members will attest to in response to this draft budget. It is because demand for services, particularly social care and support for vulnerable residents, has risen year after year while funding has failed to keep pace.
“For the past two years, Trafford has had to rely on exceptional financial support from Government simply to balance the books. But let us be clear, when councils across the country are having to borrow money just to fund day-to-day services, something is fundamentally wrong with the way local Government is funded.”
