Cheshire East Council 'faces £16.2m overspend'
- 3 November 2011
- From the section Stoke & Staffordshire
A possible overspend of £16.2m has prompted a Cheshire council to introduce a recruitment freeze.
Cheshire East Council's leader warned of "difficult times ahead with hard decisions to be made" after the half-year review revealed the cash problem.
Wesley Fitzgerald said savings of £17.8m had already been made but "we need to make even more".
He blamed the shortfall on a sharp rise in energy costs and a reduction in government grants.
"Our government formula funding grant meant that we started the financial year with £11.8m les than the year before. We received £70m while Cheshire West received £96.6m," he said.
"Cheshire East has a healthy economy but of the business rates we collect we receive back only 44 percent. The wealth we generate is in fact being used to bolster other areas which are not as robust as ours."
He was lobbying the government to address the problems but the council was "now at a point where we must make some very hard decisions, some of which will not be popular".
As well as the recruitment freeze, the council has reviewed employees terms and conditions and mileage rates for officers and elected members have been reduced.
Mr Fitzgerald said subsidies on fees and charges were being reduced and this would not be well received.
"We know this and we regret it, but we have no choice," he said.
"The soaring increases in energy costs that we have all felt in our own homes causes a massive budgetary challenge in our leisure centres and public buildings. These are currently subsidised by the council.
"It is a time of growing austerity for us all and while some decisions may be unpopular, the abiding objective is that we get through this difficult period making the best of our reducing resources, while maintaining reliable services."