Politicians in Liverpool uniting next week to urge government to tackle the authority’s “perilous financial situation”

Politicians of all parties on Liverpool City Council are uniting next week to call for urgent Government action to tackle the authority’s “perilous financial situation”.

A special budget-themed meeting of all 90 elected members is being held at Liverpool Town Hall at 5pm on Wednesday 18 September to discuss an estimated £57.6 million gap in finances for 2020/21, which is in addition to the £436 million (63%) reduction in the council’s annual budget since 2010.

The meeting will debate a motion put forward by the leaders of the Labour, Liberal Democrat, Green and Liberal parties which lays bare the council’s budgetary position.

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It warns the city’s high level of need and poverty means it cannot meet the demand for services from the levels of council tax and business rates that it collects, and notes that its reserves have “now been exhausted, leaving the council with no financial options left”.

It notes research by the independent Centre for Cities think-tank released in January 2019 which found Liverpool has lost £816 of funding per resident since 2010 – one of the worst levels in the country – and calls for an urgent meeting with Treasury officials and ministers “as a matter of urgency”.

The full text of the motion reads:

“Council notes the Government’s austerity budgeting has resulted in a 63% loss in funding, equivalent to £436m a year, from 2010 to date.

“Council also notes that the Centre for Cities say that Liverpool has lost £816 of funding per person, one of the worst levels of cuts in the country.  

“Council believes that the austerity agenda of Government is inherently unfair, removing resources from Liverpool Council to Deal with the high levels of poverty, need and demand for services. The needs and demand for services cannot be met by the low Council Tax and Business Rates that is collected annually.

“The City has used reserves to pay for statutory services and that they have now been exhausted, leaving the Council with no financial options left.

Council notes the update to the Medium Term Financial Strategy presented to Cabinet on 30 August 2019. This update identifies a potential “£57.6m budget gap for 2020/2021, which includes £32.6m of budget pressures and budget decisions still to be delivered in the current 2019/2020 year. Proving that austerity is not over for the City of Liverpool.

“As a result of Government delays to the Spending Review, the Fair Funding Review and the new Business Rates Retention System, Council does not have enough information required to set a new three year budget for 2020 – 2023 and therefore Cabinet has agreed to propose that Council set a one year budget for 2020/2021.

“This Council is united in our opposition to the continued systemic failure of Government to provide fair funding to the City that reflects our needs in providing services to residents. In particular, those affected by issues of poverty, disability, and vulnerability are most at risk of harm when services are withdrawn, while future generations of individuals and communities are at risk because services cannot support their ambitions and potential. 

“Council further notes the impacts and challenges of climate change faced by all individuals and communities, and having recently declared a Climate Change Emergency in recognition of this challenge, it is essential that Government provide fair funding to support the City Council in tackling this key issue.

“This Council and all our political leaders are united in demanding an urgent meeting with Government ministers and/or treasury officials to highlight Liverpool’s perilous financial situation and requests the CEO on behalf of the Mayor and Leaders to arrange a meeting as a matter of urgency.” 

A cross-party political working group has already been set up to look at the financial options to close the gap so the council can meet its legal requirement to set a balanced budget in March 2020.

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Mayor of Liverpool, Joe Anderson, said: “We’ve been savaged by austerity over the last decade and there is no area of council spending that has not been affected, including the loss of more than 2,500 staff.

“I am incredibly proud that we have managed to keep delivering services and protecting the most vulnerable in our city, including the homeless, people affected by welfare reform and young people and adults needing social care support.

“Along the way we have managed to find innovative ways to build new schools and create good quality housing, despite the Government axing schemes which were worth hundreds of millions of pounds to Liverpool.

“It is only down to our ingenuity and the terrific hard work of our staff and partners that we have kept the show on the road, and avoided going bust like some other local authorities.

“We’re now at a point, with our reserves exhausted, of being in a precarious position when it comes to protecting services that people rightly cherish.

“We must be frank and honest with people about the situation we are in, and have a conversation with them about what council services will look like in the future.

“As elected members we must work together for the good of the city – because this really is the worst crisis we have faced in Liverpool since WW2, particularly when you consider all the uncertainties of Brexit.

“And we have to get the message across to Government that we need to see urgent reform of local authority funding so that it is fairer to northern cities and towns – otherwise the future looks extremely bleak.”

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