Published: Friday 22nd July 2016 | 8.37am
A report to Cannock Chase Council’s Cabinet has highlighted the financial impact of the closure of Rugeley power station on top of other financial challenges faced by the Council.
Rugeley Power Station ceased production of power on 6th June.The loss of business rates from Rugeley Power Station represents 25% of the business rates income and amounts to an ongoing loss of over £1 million per annum. This has exacerbated the financial challenges the Council already faces due to Government cuts.
The proposed Mill Green Designer Outlet Village has to potential to mitigate 73% of the loss of business rates income in 2019/20.However, that still leaves the Council with a shortfall for 2016/17, 2017/18 and 2018/19.
The Council met with the Parliamentary Under Secretary of State on 11th July to apply for transitional funding relief to support the Council before Mill Green Designer Outlet Village is established, but were advised that no interim funding can be made available to the Council. The £300m Transitional Relief fund was allocated by Government to certain local authorities before the closure of Rugeley power station was confirmed.
The Council now needs to look across all budgets and services to find savings of between £1.6m to £2.4m if Mill Green does not progress.This will require some difficult decisions that will affect frontline services across the District.
Councillor George Adamson, Leader of the Council said “The closure of Rugeley Power Station in June 2016 is a body blow to the District. The Council has already lost £700,000 income from the power station this year and it will be over £1m in future years. Now that we know there is no transitional funding support from Government, the Council will need to consult on the options for making financial savings and this will impact on services for residents in the District.”
Tony McGovern, Managing Director said “The Council faces the most difficult financial position it has ever faced with the phasing out of Government grants, reduction in other income such as the New Homes Bonus and the significant loss of business rates income from Rugeley Power Station. The Council is now embarking on the development of a Financial Recovery Plan to address this situation so that decisions can be implemented from April 2017 onwards.”
A Financial Recovery Timetable has been established that sets out the process the Council will follow with formal decisions scheduled to take place in early 2017 as part of the Budget.
The Council will consult the public on all the proposed options and all information will be made available in the public domain as this could affect current levels of service provision across the District.
The Council will continue to drive out all efficiency savings during the current year, however any saving options that impact on service provision will be subject to consultation and if approved will be implemented from April 2017.