Following their budget announcement at the beginning of March, leaders at Wokingham Borough Council have been forced to defend further borrowing. After the Conservative team introduced the council’s financial plans for the upcoming fiscal year, concerns were quickly raised over growing levels of projected debt.
The council is fighting back and defending claims that it will soon become a "high-risk, high-debt council" – a situation which will directly affect the local constituency via a 4.94% council tax hike.
High risk, high debt
Commentary following the Spring Budget has highlighted the growing gap between needs and reality in public funding, with local government facing a shortfall of £5.8 billion nationally by 2020, at the same time as a rising demand for adult social care. The impact this has on local councils is especially noticeable in the case of Wokingham Borough Council, with a 4.94% council tax raise to be introduced from April. This means that, for example, residents living in Band D properties will have to pay an additional £1.23 per week.
Lib Dem councillors are arguing against the budget, deeming it "the most risky, potentially dangerous budget" in recent years, pushing the council into a "high-risk, high-debt" situation, but Wokingham Borough Council bosses suggest otherwise.
"There is a plan for repaying the debt and much of that debt will be repaid within 10 years. Investment to safeguard services for our residents – that is the most important thing we do," says Julian McGhee-Summer, Deputy Leader of the Council.
In control of borrowing
The council also proposed £6.7 million of efficiency savings and an overall budget of £113 million, but with no significant funding cuts for key local services. A capital investment programme – worth £158.2 million – will be funded by developer contributions and borrowings.
It is estimated that 80.9% of the council’s income comes from council tax alone.
The income is expected to be used in investments towards social housing, infrastructure and the town centre redevelopment, with the council’s external debt to eventually reach £271 million by the financial year 2019/2020.
Dukes Bailiffs Debt Recovery offers a range of debt advisory services. If you're concerned about any issues raised in this article or to simply learn more, contact us here.