Cllr Katie Lomas, York City Council Finance Executive, said “extremely difficult” decisions were being made to avoid the same fate as Birmingham City Council, which has declared itself effectively bankrupt.
As The Press revealed online, council officials have warned that “immediate action” must be taken after it was forecast that York City Council would overspend £11.4million next year.
A published Council paper said local government would “exhaust its reserves” if it didn’t cut spending.
York Labor has blamed the Liberal Democrats’ finance management for the inevitable cuts in services during her tenure with the Green Party.
However, the Liberal Democrats suspected that the financial situation was due to actions taken by the new Labor government since it came to power in May this year.
Liberal Democrat Group leader Cllr Nigel Ayre said: “Labour may blame inflation and other factors, but the reality is that these benefit cuts and increased fees are due to their mismanagement of the Council budget.”
But Cllr Lomas, the Labor council’s executive member for finance, said inflation was not to blame.
“The Liberal Democrats have been living in a different universe for years, ignoring the council’s structural problems which led to them plundering almost £5m of reserves and emergency funding last year, without which they would not have been able to balance the budget.” , she said .
“This kind of sophistry shows how keenly aware they are of the council’s major financial problems.
“It simply cannot continue to fund core services with reserves that are running out.
“The old Liberal Democrat government managed the council’s finances as if it wasn’t there to worry about the consequences, which has proven to be right.
“The changes made now are extremely difficult, but they are essential if the council is to avoid issuing a legal notice saying it cannot fund the operation of its services in the future, as other councils have done.
“York needed new leadership to make these difficult decisions and put the council back on a sustainable financial footing and that is exactly what Labor will do.”
Councils across England are struggling financially, including Birmingham City Council, which effectively declared bankruptcy with the 114 notice.
Kirklees Borough Council is also taking action to prevent a similar fate.
Details in the City of York City Council report said: “This is a significant overspending which is a matter of great concern and it is quite clear that the council cannot afford to keep spending at this level.”
“The general reserve is £6.9 million and whilst we have other ring-fenced reserves to draw upon if required, further expenditure of this level would quickly see the council deplete its reserves.
“Given the scale of the projected overspend, immediate action is required to reduce spending to affordable levels in both the current financial year and the next four years to ensure the council’s financial resilience and stability.”
Parking charges will increase by 10p an hour, raising around £145,000, and recruitment, agency and overtime hours will be frozen where possible.
Further measures will be reviewed on September 14th.
https://www.yorkpress.co.uk/news/23775672.councillor-katie-lomas-says-york-council-must-cut-services/?ref=rss Councilor Katie Lomas says York City Council needs to cut services