Cheshire East Council Faces Financial Crisis Unless Spending is Slashed

Cheshire East’s finance chief has raised concerns about the council’s financial situation, citing the possibility of a dire position next year if spending is not controlled and income is not increased, leading to insufficient reserves to support the budget.

The council is currently facing a funding gap of £13.1m for the year 2023/24, and aims to reduce this shortfall by the end of March, with any overspending requiring coverage by reserves. However, rising costs, particularly in adult and children’s social care, paint a bleak outlook for the next financial year unless significant cuts in service costs and price increases are implemented.

The director of finance, Alex Thompson, highlighted the urgency of addressing the trend of overspending to implement a balanced budget for 2024/25, steering clear of a potential financial crisis. Top council officers are currently in discussions with the exceptional financial support team at the Department for Levelling Up, Housing and Communities (DLUHC) to mitigate financial challenges.

Thompson noted that resolving HS2 spending and high needs related interest costs could potentially bolster reserves by up to £18m, providing relief and the means to manage local risks and support essential funding for a comprehensive transformation programme.

The gravity of this financial predicament will be addressed at the corporate policy committee meeting taking place tomorrow at the council’s Westfields HQ at Sandbach.

It is evident that the need to address the council’s financial issues is paramount in ensuring sound and sustainable governance. The sustainability of vital services and the well-being of the community depend on the council’s ability to address the looming financial crisis.