Shock £5 million black hole revealed in Wiltshire Council coffers

By Local Democracy Reporter Peter Davison

A shock £5 million black hole has been identified in Wiltshire Council’s finances. 

The Liberal Democrat administration has called an extraordinary cabinet meeting on 24th June to discuss the state of the council’s finances, just four weeks after it took power. 

Councillors will hear that increased costs in adult social care and placing children into care are responsible for most of the £4.853 million overspend. 

The overspend represents around one per cent of the council’s budget. 

Council leader Ian Thorn, told the Local Democracy Reporting Service on Wednesday 18th June that uncovering the overspend was “a surprise” and “disappointing.” 

“Was it a surprise? We have had surprises and there have been disappointments,” he said. 

“I would be misleading you to say I’m not disappointed by the current situation. But one has to deal with surprises in the most appropriate way.” 

“The financial management of the council – particularly in terms of the governance and scrutiny from members – will be significantly improved, as will the processes being applied to how we manage our money,” he pledged. 

Councillor Gavin Grant, the council’s cabinet member for finance, said that the deficit was an “unwelcome inheritance” from the previous administration. 

He said that the council would be forced to dip into its reserves as a short-term measure to balance the books – and at next week’s meeting the cabinet will be asked to approve this decision. 

“As a council, we are required in law to balance our books each year. An unexpected almost £5 million deficit is unwelcome and a challenge,” said Cllr Grant. 

“Using reserves is not a long-term effective solution, but they are in place for this very reason.” 

Both Cllr Thorn and Cllr Grant reassured users of adult social care and children’s services that they had no plans to cut provision to bridge the financial gap. 

But they did not rule out future increases in council tax. 

“The previous administration decided not to raise council tax,” noted Cllr Grant. 

The administration said that a new cross-party scrutiny committee would be established to monitor, on a monthly basis, council expenditure. 

“We plan to further strengthen our financial scrutiny with a new committee focused on this area, providing an open and forensic challenge of the budget, said Cllr Grant.” 

“This means that no stone will be left unturned in securing financial stability for the long-term so that our communities get the services and support they need and deserve.” 

The administration also confirmed the appointment of councillor Andrew Griffin as portfolio holder for finance – a first in the 16-year history of the unitary authority. 

Answering to Cllr Grant, he will oversee the finances in adult social care and children’s services, while cabinet member Jon Hubbard continues to take responsibility for the delivery of children’s services, and cabinet member Gordon King ensures the delivery of adult social care. 

The council said that despite the overspend, the authority “continues to be in a stronger financial position than many others” and was seeing increased income from leisure services, car parks, and green waste collection. 

Cllr Richard Clewer, who led the Conservative administration until May’s council elections, said the overspend had also come as a surprise to him. 

“We genuinely had no idea about this,” he told the Local Democracy Reporting Service. We were assured we would achieve a balanced budget, we tested it, and then we were reassured that the end-of-year position would be a balanced budget. 

“We urgently need to know how this overspend has happened.” 

He refuted suggestions that oversight had not been tight enough, saying: “Scrutiny has always worked well at Wiltshire Council.” 

And he said the previous administration’s decision not to raise the council tax was not to blame. “We always believed council tax should be set against the council’s need, and no more. We had to consider the cost-of-living crisis.” 

Pictured: County Hall