Labour Leader, Cllr Roger Lawrence, and Cabinet Member for Resources, Cllr Andrew Johnson, hit back at opposition claims the budget is being mismanaged.
Last year the scale of the challenge facing Wolverhampton was to save £123 million by 2018/19. The scale of savings is now £134 million. The increase is largely due to the rising costs of looked after children, pay and pension costs, and continuing Government grant cuts. Significant progress towards the savings needed has been made – £88 million has already been identified. Across the five years £46 million now remains to be identified.
Cllr Roger Lawrence said, “Since this Government came into power Wolverhampton has been cut by over 50%, while the Government has protected far wealthier areas of the country from the same level of cuts. This is fundamentally unfair. However, this administration remains committed to running the council prudently despite the enormous strains. We have an obligation to everyone in the City to balance the books, while at the same time doing everything possible to protect essential services, invest in job creation and grow our local economy. We remain firmly in control of the City’s finances despite the Government’s attack on our City.”
Cllr Johnson said, “The opposition has sought to deliberately misrepresent council finances by implying we are building up unnecessary debt. In order to achieve our key priorities to regenerate the City the Council borrows money to invest in the City, much of which comes with funding. For example, borrowing of this kind enabled us to attract JLR to the i54 site and secure hundreds of jobs. This borrowing is fully funded from business rates. Similarly block 10, which is being built now, will be fully funded from rental income.”
“We know regeneration of the City Centre and job creation are priorities that local people and businesses support, and this is the mechanism by which regeneration activities and job creation are enabled to take place. To suggest borrowing of this kind is a mismanagement of Council finances is inaccurate and irresponsible.”
“It is also important to make clear that the Council is not able to borrow to fund debt/an overdraft in the same way the Government can, we can only borrow for capital expenditure purposes, i.e. to invest in our city. The controls around this are extremely tightly regulated and what we do has to be prudent and transparently reported to full council in our treasury management strategy at least twice a year. We are confident we are effectively managing our working capital, cash flows and borrowing to get best value for the City and in a way that enables us to deliver on our priorities for the City.”
Full Council on 4th March will include on the agenda the Budget 2015/16 and Medium Term Financial Strategy 2015/16 to 2018/19.