Cheshire East Council to transform for financial sustainability

22 March 2024

Cheshire East Council is set to transform the whole organisation with a programme of work to become financially stable. As part of its plans, it will focus on supporting those who need help the most across the borough.
The council recently approved a balanced budget for 2024/25 as part of its medium-term financial strategy (MTFS) 2024-28.  However, it forecasts a four-year funding gap of £100m, to balance its budget and to ensure it holds an appropriate level of reserves.
It has set out the case for transforming the organisation and the way it delivers services to reduce the funding gap. 
The council’s corporate policy committee has approved the transformation approach by the chief executive, Rob Polkinghorne, in the report to the committee. This includes the procurement of a transformation partner – an organisation to bring additional transformation expertise and capacity to support the programme.
Rob Polkinghorne, chief executive said: “Transformation will initially focus on financial recovery before moving on to service redesign in the longer term. We need to invest in capacity to change in order to deliver future savings and efficiencies – but any external partner will be required to identify savings that far exceed their costs.
“Work to prepare for and inform the transformation programme is already underway.  The Local Government Association (LGA) is supporting with a corporate peer review and a review of organisational leadership capacity and structure.  The council has also received grant funding of £105,000 from the LGA to support our transformation work, although we will need to use reserves to fully fund investment in the programme.
“We will be looking to take full advantage of digital solutions, ensuring that support is accessible and that our workforce is flexible with the right skills to work effectively within a transformed council.” 
Councillor Sam Corcoran, leader of the council and chair of Cheshire East Council’s corporate policy committee, said: “Inflation peaked at over 10 percent, but council tax only increased by 4.99 percent. In addition to the rising costs of services, the demands on social care for children and adults has increased. These factors affect councils across the country. 
"Many councils are facing funding pressures. Due to its low level of reserves, Cheshire East Council needs to move at pace to address the funding-gap.
“The exceptional financial support, agreed in principle by government, does not provide any additional cash or funding.  It enables the council to spread the cost of immediate pressures, up to £17.6m, freeing up reserves and reducing the imminent risk of a Section114 (S114) notice. However, this would come with additional costs in interest payments, so we would want to avoid using that facility if at all possible.
“Uncertainty about future government funding and the existing financial pressures continue to present a significant challenge.  We must continue with our established in-year spending controls and ensure timely delivery of the changes set out in the MTFS. In addition, the council must transform to improve financial sustainability and to ensure we can continue to deliver our priorities, services and support for Cheshire East residents.”