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500 jobs could go as city council eyes 5% tax hike to tackle £28m deficit

Up to 500 jobs are at risk at Wolverhampton and residents face a council tax rise of 4.99% in what has been described as “the most significant financial challenge the council has ever faced.”

The local authority faces a budget deficit of more than £28m by the end of 2019-20, and still needs to save £6m before the new financial year.

A report by the council’s director of finance has also warned that as well as addressing next year’s deficit, addition cuts between £40m and £50m will be needed over the next five years.

The authority’s leaders have drawn up £5.4m worth of savings which will need to be agreed on before the end of March, and cabinet members will meet next week to consider the options put forward to address the forecasted budget hole.

They will also discuss a proposed council tax increase of 4.99% next year – 2,99% plus a 2% adult social care precept.

Cllr Louise Miles, City of Wolverhampton Council’s cabinet member for resources, said: “In common with councils right across the country, we continue to face cuts from central government which are having an enormous impact on services and jobs in our city.

“The national picture in terms of government funding shows no sign of improving and the demand for our services continues to rise. This means we have no choice but to continue to find ways to save money and raise income.

“As always, we will communicate the extent of the budget challenge to our residents as we begin the initial stages of consultation.

“We would rather not have to raise council tax by 4.99%, which includes the 2% adult social care precept, but the challenge is such that we have to propose the maximum increase.”

Since 2010, the council has had to shrink its budget by more than £220m, losing a third of its workforce along the way in response to rising demands amidst a backdrop of central government cuts.

Miles said the council wants focus on engaging with the community to manage a way through the cuts, and a public consultation will also be discussed next Wednesday.

She added: “One of the major issues we face is a lack of information from Whitehall about how local government will be financed in the future.

“We would welcome clarification from central government on how they intend to finance services in Wolverhampton, in particular our adult social care services, where the publication of a government green paper remains delayed since the summer.

“We have faced austerity for the best part of a decade and have still managed to be named 'council of the year' and attracted billions of pounds of investment, bringing jobs into our city. We will not allow anything to derail those priorities or our ambitions for Wolverhampton.”

Councils up and down the country are facing significant budget deficits, with Northamptonshire CC the mostly widely reported of these after becoming the first council to issue a section 114 notice in 20 years, before issuing its second major spending ban in July.

Other councils such as those in Somerset and Oxfordshire face a similar situation as Wolverhampton council, with major job and service cuts on the horizon.

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