WORCESTERSHIRE County Council has defended itself against allegations it did not reveal the true extent of its financial troubles.
The authority’s finance chiefs spent £30,000 of taxpayers’ money on a review of its finances, carried out by the Chartered Institute of Public Finance Accounting (CIPFA). It was published in June 2017, and revealed
Worcestershire County Council had bigger financial problems than had been suggested previously.
CIPFA projected a £26.4million blackhole for 2018/19, rising to £60.1million by 2020/21, but the ‘negative’ findings of the Financial Resilience Review only came to light after a Freedom Of Information request submitted by the Bureau of Investigative Journalism.
Former chief finance director Sean Pearce commissioned the CIPFA report for Leader of the Council Simon Geraghty, who is also cabinet member with responsibility for finance.
It stated the authority aimed to make target savings of £21.3million but was already in the red by £10.2million.
Meanwhile, the authority’s own budget report for 2017/18 revealed it had already overspent its budget by £7.2million.
CIPFA said the council was not only ‘over-optimistic’ about its current finances, but there was a lack of urgency in its response to current challenges.
Labour leader Coun Peter McDonald said he had no idea the CIPFA report even existed until now.
“It’s absolutely disgraceful. We have a controlling group and leader, who, when it comes to finances, buried their heads in the sand,” he said.
“I sincerely believe within two years the Government will be sending in the commissioners to run the council.
“You can’t shave any more meat off the bone because it means whatever services we’ve got left will collapse.”
CIPFA said the council’s medium-term financial plan was ‘not currently sound’ and the demand for services was ‘untypically high’ at 2.5 times the growth in resources.
The review advised the council to make a radical overhaul of its savings programme and ‘urgently consider short-term initiatives’ like a ‘targeted staffing freeze’.
It also recommended ‘a sense of urgency appropriate to the real challenge’.
However, analysis of cabinet documents shows much of CIPFA’s advice was ignored, that there was no mention of the report and no recommendations made in the minutes of council meetings.
A Worcestershire County Council spokesperson said: “Feedback was received in a presentation to an internal meeting of Cabinet and Strategic Leadership Team.
“The approach taken by the council was in line with the CIPFA advice and also helped us to shape how we moved forward with our medium term financial plan.
“We listened to the professional advice from CIPFA and increased our assumptions around council tax rates.”
“The review also supported a refresh of our transformation plans and longer term investment into children’s services, both of which were included in the medium term financial plan.
“Despite the budgetary pressures, we are in a robust financial position and a balanced budget for 2018/19 was approved by councillors in February 2018.”
