A £300,000 black hole created in Worcester City Council’s budget by the Government slashing their main support grant will be plugged by using New Homes Bonus cash.
The Conservative Administration at the Guildhall have had to revise their spending proposals after the Revenue Support Grant, cash handed to the local authority by the Government, was cut by £653,000 for 2016/17, a sharp fall from £1.8million in 2015 to just over £1.2million for the coming year.
Chancellor George Osborne will axe the support grant all together by 2019 as he ushers in a new system of allowing councils to keep 100 per cent of the business rates by the end of the decade.
Council chiefs have now plugged the £359,000 gap in their budget proposals by raiding their New Homes Bonus fund, worth £2.3million, which is funding the council receives every time a new house is built and occupied in the city.
And despite the funding coming in much worse than expected, a record £11million will still be invested in projects this year, such as the new eight-lane pool in Perdiswell, improvements to Gheluvelt Park and enhancing Worcester’s city centre and riverside.
Coun Chris Mitchell, Cabinet member for Resources, has said the council has still managed to balance the books despite the funding fall.
“Worcester City Council is working to set a balanced budget for the next three years, and can achieve this despite a reduction in the Revenue Support Grant which we receive from Government, Coun Mitchell said.
“Our balanced budget will also provide £1million to invest in improvements to Worcester as a place in 2016/17.
“We are proposing to use a proportion of the money we receive from the New Homes Bonus, worth £2.3million in 2016/17, to support our front line services in order to achieve those balanced budgets.”
Councillors will vote on the budget at the next full council meeting in February, but with a Conservative majority at the Guildhall it’s expected the spending plans will be voted through.