Struggling Liverpool Council could cut services without immediate help

Council chiefs in Liverpool have called for emergency funding in the Chancellor's Autumn Statement tomorrow and suggested that without immediate help, the local authority may have to cut services.

In a letter to the Chancellor, council leader Liam Robinson and his deputy, the council's finance lead Ruth Bennett, have written of the myriad crises facing the local authority.

He stated: "The Conservative government has cut funding to our city by £314m in real terms since 2010, which is equivalent to 56% of the funding we received from the last Labour government. Conservative funding cuts have been unfairly targeted at areas like Liverpool - in the same time period, council budgets in prosperous areas like Wokingham have only reduced by 3%."

He added: "Councils across the country, and of all political colours, are united in saying that local government funding is not sustainable. An increasing number of councils are warning that they could effectively go bankrupt in the coming months."

Cllrs Robinson and Bennett have laid out the key areas where Liverpool Council is facing funding emergencies.

On inflation, he wrote: "Inflation soared after your government's mini-budget crashed the economy and is still at a much higher level than anticipated and has added significant costs to our council." He suggested high inflation has cost the council a further £77m in terms of what it can spend on services.

On children's services, an area where Liverpool Council was admonished by Ofsted earlier this year, the letter said there have been spiralling costs in terms of caring for the most vulnerable children in the city. He added: "This spiralling cost, fuelled by private sector greed, is placing significant additional financial strain on many councils, including Liverpool."

Cllr Robinson has previously described the homelessness situation in Liverpool as an emergency and called for urgent funding. In his letter to Jeremy Hunt he added: "For 2023/24 the homelessness budget in Liverpool has had to be increased from £12.5m to £18.2m, to reflect the significant demands on the service and lack of "move-on" accommodation.

"Despite this, we are currently anticipating an in-year budget pressure of a further £2m. For context, in 2018/19 Liverpool spent just £1.5m in meeting our statutory homelessness duty." He pointed out that the council is currently paying for 572 people in bed and breakfast accommodation, with 407 of these having exceeded the six weeks statutory limit for such a stay."

The council leadership team added: "In addition to this, government migration policy, including the rapid closure of asylum hotels, is leaving many councils to pick up the additional costs."

The council is also facing significant increased costs for long-term care arrangements for adult social care. Cllr Robinson and Cllr Bennett said: "The current market position is extremely fragile, with many providers highlighting significant concerns for their financial sustainability in the immediate future as well as recruitment and retention issues in the sector.

They added that what is needed is a long-term solution and reform of the funding model for social care, adding that Liverpool has had to increase its adult social care provider fee rates by an average of 14% in 2023/24 at a cost of over £34m, significantly more than it received in additional grant funding in this area.

Other cost pressures outlined in the letter to the Chancellor include rates for Home to School Transport for children with special educational needs and disabilities. Cllr Robinson and Cllr Bennett said these costs "continue to spiral" due to an increase in both the numbers of children requiring transport but also the inflationary pressures on fuel and pay. The council is expecting to spend £15m in this area this year - a forecast £3.4m overspend.

The council leaders said that rising interest rates have meant that the cost of borrowing for local councils has soared. He added: "The latest estimate is that the council's interest expense will be £5m higher than the previous year.

Calling for a fair funding deal for councils, Cllr Robinson and Cllr Bennett added: "These funding pressures are largely a direct result of government policy, including the disastrous mini-budget last year, which crashed the economy. Your government should bear the responsibility of meeting them, rather than once again forcing councils to increase Council Tax bills. This is simply not sustainable during a cost-of-living crisis."

The letter added: "Without immediate action, councils will need to make increasingly difficult decisions about services we will have to reduce or stop all together. You have an opportunity in the Autumn Statement to deliver a fair deal for Liverpool - to protect vital services and to avoid increasing the tax burden on families still dealing with a cost-of-living crisis that your government caused when you crashed the economy. We urge you to take it."

The Chancellor will reveal the details of the Autumn Statement tomorrow lunchtime.

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