Residents in Trafford are being faced with a council tax hike of at least 4.99 per cent as town hall bosses bid to plug a £6.4million budget gap in the next financial year.

And the council’s finance chief has issued a stark warning over proposals for savings which ‘may require consultation with the public, businesses and staff’ before the end of this month.

In a report to the authority’s executive which meets next week, director of finance and systems Graeme Bentley, warns of an increased risk of the authority being legally prevented from planning new expenditure – known as a Section 114 Notice.

He wrote: “Despite a long track record of robust, effective and prudent financial management, in my opinion, the risk of a S114 notice has increased, following over a decade of austerity measures and due to the rising demand pressures in social care services and the continuing impact of the cost of living on the council. 

“The council has minimal financial headroom to absorb financial pressures meaning the likelihood of a S114 remains a real concern during 2024/25. 

“This highlights the importance of containing expenditure within budget during the current financial year and making further tangible progress to delivering further transformational savings required to balance the 2024/25 budget.”

Mr Bentley said the final decisions will be taken by the executive after taking into consideration further proposals to address the gap, all relevant matters and feedback, at which time a proposed budget will be put to full Council for approval on 21 February 2024.

He has recommended a 4.99 per cent increase in council tax, including two per cent for the adult social care precept and a 2.99 per cent general increase.

However, an alternative option would be to increase the ‘relevant basic amount of council tax’ above these levels. But this would trigger a local referendum – a requirement should such an increase be implemented.

Meanwhile, senior councillors on the Labour-controlled authority point to a budget cut by 60 per cent in real terms in the last decade, and say will also have to find further savings of more than £35m by 2026 if Government funding is not reformed.

In particular, Trafford has faced increased demand on its children’s and adult services which deal with some of the most vulnerable people in society. 

Mr Bentley went on: “The in-year budget monitoring position broadly signals the council’s ability to manage its finances, albeit it does mask a number of financial challenges and growing demand pressure most notably in children’s social care.”

He said the council’s net expenditure on children’s social care is forecast to be overspent by £1.7m in 2023/24, adding: “Whilst a number of mitigating expenditure controls have been introduced, if this position is sustained, then this will lead to an unplanned use of budget support reserves which would negatively impact on the financial stability of the council.”

The draft revenue budget proposals, which will be discussed at the next meeting of the executive on November 15, showed the authority has closed the budget gap by £13.6m. But finance chiefs still need to find an additional £6.4m in savings before a balanced budget can be presented to the council in February.

Coun Jo Harding, executive member for finance, change and governance, said: “Trafford has been given a raw deal in the way the Government calculates the support it offers to local councils.

“We’ve worked so hard to provide quality services with less money but there will come a breaking point. We are not in the same situation as some councils who have declared themselves bankrupt but after 13 years of funding cuts, it gets harder and harder for us to set a budget every year.

“Following Covid and the cost-of-living crisis, more and more people need our help. We will always do the best we can but we are currently operating with one hand tied behind our back.

“We need a fairer funding settlement so we can continue serving our residents, businesses and communities.”

Trafford has joined a group of 20 lowest-funded councils (the F20) to lobby the Government for a temporary resource solution pending a Fair Funding Review. 

The report to Trafford’s executive reveals that similar authorities in England receive £11m more on average each year.

On the subject of the proposed council tax increase, Councillor Harding said: “If we had a council tax level at the average of our neighbours in Greater Manchester, we would receive an additional £16.44m per year. 

“But all that does is shift the burden onto our residents who are already struggling with the cost of living.

“We’ve joined with councils in a similar predicament to call on the Government to bring forward its Fair Funding Review.

“We have made savings and established extra funding streams but what we need now is a fairer deal for our residents.”