Council leaders from Stoke-on-Trent have met with Parliamentary Under Secretary of State (Local Government and Building Safety) Lee Rowley to discuss finding a way forward to resolve the financial challenges faced by the authority.
In early September a report prepared for the council predicted a £13mn budget shortfall. This has been reduced to £8.5mn through the implementation of budget management actions.
Burden on city finances
Most of the extra demand on the city’s finances has been created by the rising cost of providing services for children in care, the number of whom has risen from 653 in 2017 to 1,120 in July this year.
Together with the impact of rising inflation, this has seen spending rise from £44.3mn to £92.4mn over the same period. The city’s high levels of deprivation and low financial reserves were also cited as contributing factors.
Speaking to the BBC in September, council cabinet member for finance Alistair Watson said “the authority was spending more than it could afford and that it could not sustain services” without immediate help from the government.
Risk of bankruptcy
Concerns were expressed at the time that the council might be forced to issue a Section 114 report, freezing all non-statutory spending and effectively declaring bankruptcy.
In a statement issued following the meeting with Rowley on 23rd October, council leader Jane Ashworth said leaders had explained the “careful and measured approach” that has been taken to review the “serious and sombre” financial situation they had inherited when they took over control in May.
Strategies for the future
Prior to the meeting, the city council announced a shift in strategy regarding some of the major developments signed off by the previous Conservative administration.
This will see the Etruscan Square development on the site of the former Hanley bus station refocused towards housing, with plans for a 3,000-seat arena scrapped.
Historic buildings on the former Spode pottery works in Stoke will also be redeveloped as a hub for the creative industries.
The overall aim of the change in strategy is, the council say, to continue the transformation of key sites, but to do so in a way that “enables more residents to benefit from regeneration and delivers value for money in challenging economic times.”
Talks with ministers to resolve the city’s financial difficulties are, Councillor Ashworth said, “ongoing” and being conducted in a “spirit of openness”.
She stated that the council has “a thorough to-do list which leaves no stone unturned in tackling the severe financial challenges we face in delivering a balanced budget and providing sustainable services our residents want and need.”