Budgets and finance
On 4th March 2020 the council set its budget for the 2020/21 financial year.
In 2020/21 non-ringfenced government funding is 61% lower than that received in 2010/11. This means we have had to find a further £29.3m of cuts.
Had the amount of funding received by Liverpool in 2010/11 increased each year in line with inflation, then the council would have been £433 million better off in 2020/21. A report by the independent Centre for Cities showed that Liverpool has suffered the largest cut in funding per resident of any city since 2010 (£816 per person).
Liverpool City Council continues to protect services to the most vulnerable in our society whilst at the same time helping the local economy to grow, ensuring that it benefits as many people as possible.
Through a combination of considerable effort, Government lobbying and invest to earn schemes the council has been able to significantly reduce the amount it needs to find from frontline services by around half, down from £57.6 million to around £30 million. This is due to:
- Improved business rates and council tax income for 2020/21 as a result of the city’s economic growth and the number of new homes built – both key planks of Mayor Joe Anderson’s Invest to Earn strategy.
- Reduced contributions of £15 million to the Merseyside Pension Fund for 2020/21 because the council has negotiated to pay in less as its investments have performed better than expected.
- Additional Government funding of £10 million for adult social care.
The 2020/21 budget includes a 3.99% increase in Council Tax, raising an extra £7.2 million compared to 2019/20.
This is made up of 1.99 per cent for general spending and two per cent which is ring fenced for adult social care.
Almost 60 per cent of households who live in Band A properties will pay an additional £43.90 per year for local authority services, which works out at 84 pence per week.
The amount of income that the council can raise from Council Tax is limited due to the high proportion of properties in the lower tax bands. If Liverpool’s tax base was more in line with the average for England as a whole, then it would be able to generate an additional £102 million in council tax income.