City acts to avert £8m ‘blackhole’

Sep 15 2007 by David Bartlett, Liverpool Daily Post

Liverpool town hall could be the site of any city region government covering the whole of Merseyside (200)

A PACKAGE of measures is being drawn up to help stave off an £8.1m deficit in Liverpool City Council’s budget.

A quarterly budget yesterday revealed the city is facing £3.3m of budgetary “pressures” in its community services department, £3.8m in children’s services, on top of a £1m deficit in the culture budget.

Last night, town hall officials said the potential overspend was only 1% of the council’s budget.

They blamed the Government for not handing out enough central funding to deal with problems like an ageing population and an influx of children seeking asylum in the city, which they say are driving up local spending.

Labour councillor Joe Anderson said the figures showed the council’s financial strategy was in “real trouble” and council tax hikes could be on the way.

But council leader Warren Bradley said the council had managed to improve services while lowering taxes and intended to continue doing so.

The quarterly review said the £1m culture deficit will be absorbed as the year goes on.

But the remaining £7.1m in social care is far more significant, and officials admit it “appears to be an ongoing problem”.

The deficit in children’s services was brought on by the cost of supporting large numbers of unaccompanied asylum-seeking children, placement of children in care, and specialist residential establishments.

Liverpool is currently lobbying the Government for more money to cover the asylum deficit.

The council also operates Gladstone House secure unit for difficult-to-handle children in Fazakerley at a deficit of £800,000 for this year, despite there being no Liverpool children in the facility.

Officers warned the council could close the unit unless the costs are met by the Home Office.

Cllr Dave Antrobus, executive member for adult services, said the overspend in his department was down to pressure from the changing demographics, with people living longer.

Officers advised ways of dealing with pressures would be to raise charges and restrict those eligible for care.

But Cllr Antrobus insisted changing the eligibility criteria was not an option – although he warned an inflationary rise in charges might be needed.

Cllr Bradley said his administration would not follow other authorities which have cut services from people with “moderate needs”.

He said: “If there was something to hide, we would not have brought out this up-to-date financial monitoring report. We have got stable finances. In the last few years, we have taken £100m out of the budget.”

But Cllr Anderson said: “Clearly, we have a black hole of £8.1m. These issues have not appeared overnight – many other authorities across the country have managed to deal with them.”

davidbartlett