ANGRY Labour councillors fear Wyre Forest District Council is headed for financial disaster due to an “unsustainable” budget model adopted by authority chiefs.

Members including group leader Nigel Knowles and senior Stourport councillor Jamie Shaw said austerity measures as a result in Government funding cuts, a reliance on borrowing and outsourcing services had resulted in escalating debt, dwindling assets and poorer services for taxpayers.

But the council blasted the claims as “alarmist and inaccurate” and defended its “sound” financial management.

As part of their own investigation into finances, Labour said that in 2010 the council had assets worth £62million and debts of £5.7m.

But they said asset value now stands at £46.5million and debts have risen to £26million, with a further £35million more borrowing planned. In that time, Labour said business rates income had been reduced by £4.2million.

They also criticised the council for pressing on with projects such as the £3million Green Street Depot, which will house a number of services including those provided by the Town Hall hub when it opens in 2020, and speculative investment in commercial property.

Councillor Knowles said housing should be a priority for borrowed money as it would guarantee a return and address a social need.

He added: “We need an end to austerity. There have been so many cuts to services, increased debt and a refusal to take on full responsibility to run services.

“The Tories give out contracts to the private sector, who end up being more expensive than in-house providers, and we all remember what happened to Carillion that collapsed without proper oversight and despite auditors saying everything was fine.”

Councillor Jamie Shaw said: “The Council has an official black hole in its finances of £1.6m come 2021. It is proposing to use its reserves to plug that gap.

“None of the sum identified as efficiency savings for this year of £111,920 had been identified when Nigel Knowles and I met the Corporate Director for Resources, in June.

“This is all deeply concerning and the whole model they are operating under is unsustainable”.

Wyre Forest Labour spokesman Stephen Brown added: “If this massive escalation of debt doesn’t concern residents of Wyre Forest who continually elect the Tories, locally and nationally, then it should.

“Another £3m of borrowing rests on getting their Depot 2020 (Green Street) up and running, all to save £50k per year at the Town Hall.

“This, just as we learn the proposed income from their plans which they claimed was needed to shore up council income, has taken a £30k a year hit because of flooding they didn’t ‘foresee’. Yet they intend to plough on regardless.

“They could be compared to a low paid worker not earning enough to live on, running to pay day lenders and getting deeper and deeper into trouble. They are incompetent and need to be held to account for the way they are ruining council finances.”

A Wyre Forest District Council spokesman said £70,000 of this year’s efficiency savings have been identified while the rest is being worked on and added strategies were in place to tackle risk issues such as the £1.6million funding gap.

Cabinet Member for Resources Councillor Nathan Desmond said: “We reject these claims, which are both alarmist and inaccurate. The council’s financial management is absolutely sound – as our annual independent audit recently highlighted.

“Yes, we, like all councils, face financial challenges ahead, as the way local government is funded changes.

“The £1.6 million funding gap has been widely and openly reported and debated and all members encouraged to offer suggestions on how we can become more financially self-sustainable.

“We are not complacent, we are actively working to improve our services and generate financial savings through our transformation initiatives to provide even greater value for money, grow our commercial income and explore different ways of delivering services.

“As we look ahead and move towards becoming self-financing it will be crucial that we continue to grow our economy and carry on the council’s good work in supporting businesses and increasing employment opportunities and the approvals for the Capital Portfolio Fund and Development Loans Fund underpin this.”

Council Leader Councillor Marcus Hart added: “Councillor Knowles and Councillor Shaw are seeking to make a number of political points.

“WFDC is not heading into a deeper financial crisis and I do not recognise many of these statements as being accurate. This council and administration has a sound track record of managing our decreasing funding envelope and making sensible decisions accordingly.

“It is a shame Councillor Knowles and Councillor Shaw do not contribute in a more constructive manner in shaping what the council will look like, as it continues to run value for money services on behalf of our residents whilst ensuring a balanced budget despite the revenue funding gap.”