The new leader of Kirklees Council, Cathy Scott, has laid out her plans for making £47.8 million in savings but warned: “It’s going to be painful.”

The council has approved its Medium Term Financial Strategy which Clr Scott says will plug the deficit and set the district on a path towards economic growth.

The council’s deep financial problems – compounded by austerity and years of under-funding – has left the local authority on the brink of declaring itself effectively bankrupt.

As many as 750 jobs are to be axed, services reduced and charges increased. There are no details yet on exactly how many jobs will be lost, and in which departments, or which council services will bear the brunt of the cuts.

Speaking at the full council meeting when she was officially elected leader, Clr Scott pledged to be open with the public and council staff and said: “Some of the savings we need to make will be painful, and that’s being honest.

“But the consequences for vital services would be far worse if we don’t balance this budget.”

Here’s what Clr Scott told the full council meeting at Huddersfield Town Hall on Wednesday night:

“Kirklees is one of hundreds of councils facing immense financial pressures. The word ‘crisis’ does not do it justice.

“The Local Government Association estimates there’s a £3 billion black hole in local council finances. That’s why residents all over the country are seeing local services squeezed.

“Residents also deserve to know how we are going to overcome these challenges and our plan to avoid the fate of Birmingham, the latest – but almost certainly not the last – council to declare bankruptcy.

“Ever since the economic crisis began we have been open with the public and we will continue with that approach in the difficult months to come.

“The past 18 months has proved to be one of the most difficult, chaotic periods in recent British economic history.

“Inflation has run at over 10% for most of the year. Inflationary pressures on energy, goods, services and pay all added around £25 million to our costs in the last financial year alone. Even though inflation has dipped in recent months, prices are still increasing at a rate that we haven’t seen for decades.

“But there have been pressures on our budget that go way back. Demand for vital services like supporting children who need extra care help and, of course, in adult social care are increasing all the time. In the past year alone we have seen a 15% increase in the number of users accessing home care services.”

“Of all the pressures what frustrates me the most is the under-funding that we have in Kirklees. How can any government justify the Institute of Fiscal Studies finding that residents in Batley get less local government funding than in Buckinghamshire?

“The system is broken, it’s a national disgrace and it penalises people in Kirklees every single year.

“Even introducing the proper floor of funding calculations would have given us an extra £17 million a year and it would have cost Kirklees taxpayers virtually nothing. That’s why we are lobbying for change. The government agreed with us seven years ago and launched a Fair Funding Review but again we wait for that pledge to be honoured.

“Austerity has ripped at least £200 million out of our budget every year. That’s a conservative estimate – literally. We are talking at least £1 billion that should have gone into our community but it didn’t.

“We have invested in Children’s Services and there’s nothing more important that we need to do. And we pledged that austerity would not be repeated on the public realm so we needed to invest in our economy and our infrastructure. Despite the pandemic we stayed true to our pledges.

“In all that time and despite the long running pressures we have been a prudent council. We have always kept a level of reserves that would protect services against economic shocks. I have lost count of the number of times I’ve heard councillors say ‘spend our reserves.’

“I shudder to think of the consequences if we had taken that advice. Spending our reserves would have been the single most catastrophic decision ever made in this council chamber.

“When the economic crisis duly arrived we were able to mitigate some of it. In line with Government advice we used our reserves to protect our services and that was over £100 million spent to date.

“The fact is the cost-of-living crisis persists, demand pressures are increasing and the underfunding continues to be built into this system.”

‘One single sobering challenge’

“We need to find £47.8 million in savings before the council sets its budgets next year. That’s the bottom line. The question is how do we meet these challenges.

“We have always taken tough decisions to reduce the costs – spending controls, a recruitment freeze, income generation, accelerated asset disposal and an on-going review of the Capital Plan.

“We have brought forward some savings proposals and income generation plans and we planned that for later in the year. All these are reducing the cost but the scale of the challenge means we must go further.

“The Medium Term Financial Strategy tells us how we will do that in tune with our council’s values. This means growing the Kirklees economy, delivering new housing and making sure our infrastructure attracts further investment.

“A thriving economy begins with revenue to the council and protects residents from future economic shocks. The plan also means finding more efficient ways of delivering services to residents, reducing management and administration costs as well as the scope of some services.

“It will also mean recovering a great proportion of the costs in some services which are currently being subsidised.

“Finally, the plan describes how the council will prioritise the funding towards people, families and organisations where it can have the most impact.”

‘So where do we go from here?’

Clr Scott said: “We have asked council directorates to shave their budgets for next year. Cabinet colleagues will scrutinise and shape their plans over the coming months.

“On top of that we have asked for savings proposals to be brought forward and implemented within the current year. The earlier we can implement the savings the easier it will be to close the deficit.

“In the coming weeks Cabinet will debate some of those. We will be open with residents and our workforce about them. We will consult on the budget later in autumn.

“Kirklees residents and our brilliant staff should not be paying the price of the government economic incompetence and their indifference to public services.

“They should not be paying the price of a funding system that was so manifestly unfair. They should not be paying the price of more than a decade of failure to tackle the country’s most pressing issues. Those failures mean some of the savings we need to make will be painful, and that’s being honest.

“But the consequences for vital services would be far worse if we don’t balance this budget. Sustainable funding underpins everything we do and what our plan will do is deliver.”

Cathy Scott elected leader of Kirklees Council amid ‘name and shame’ row over councillors’ pay cut