MALVERN Hills District Council has revealed it will lose £700,000 over the next three years after its Government funding was reduced much faster than expected.
The authority had anticipated the Revenue Support Grant (RSG) – the main fund the council receives from the Government to help run day-to-day services – would be phased out and disappear completely by 2019/2020.
But details of the council’s funding settlement over the next four years has shown cuts will take place much faster than first feared with the council set to lose more than £710,000 over the next three years.
The blow could lead to fears that much valued day-to-day services may be scrapped inorder to make the savings required.
During the next financial year MHDC will receive £778,788 from the grant – almost £200,000 less than budgeted for in its Medium Term Financial Plan.
The grant will more than half in 2017/2018 to £360,572 and then drop by 71 per cent in the following year to £103,595 before disappearing completely in 2019/2020.
Some of the money lost will be replaced by a new rural services delivery grant which will be worth £56,000 next year rising to £183,000 a year by 2019/2020.
The council said in a statement it must increase its savings per year with an additional £200,000 needing to be found in the next financial year 2016/17 and £400,000 over the following two years.
The funding blow means district council bosses are set to make difficult decisions in coming months regarding how to make the huge savings needed.
Coun Paul Cumming, responsible for finance at Malvern Hills District Council, said: “While the overall amount needing to be saved has remained the same, the speed at which our funding will be reduced will pose us significant challenges in the next two to three years.
“It means some difficult decisions have to be made. However, as I’ve said before, we’re committed to protecting front line services as much as we possibly can. We’ve already demonstrated how we can do that through the sharing of senior management posts and other services.
“Malvern Hills District Council has a good track record when it comes to saving money and we’re developing a robust business plan which will set out exactly where we expect these savings to come from. I’m confident we will meet the financial challenge facing us.”
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