The financial position in 2023 to 2024
In September 2023 our regular financial reporting revealed a forecast end of year budget shortfall of £46.4 million and immediate action was taken across the council to address this.
A number of strict cost-control measures were introduced and remain in place, including
- freezing recruitment except for essential jobs, and reducing the use of agency staff
- reducing overtime
- no non-essential conferences, travel or training
- reducing print, IT equipment and stationery spending
- only carrying out health and safety repairs on properties
- where expenditure is non-essential, ceasing or delaying procurement for supplies and services and postponing projects still in the planning stage.
The forecast overspend has been reduced to a current end-of-year forecast overspend of £34.1 million. This reduction is the result of the cost-cutting measures, departmental savings, the use of reserves and the receipt of additional grant funding, and it is planned to mitigate it by the end of the year with funds released from earmarked reserves.
The financial position in 2024 to 2025
Due to prudent financial management we have been able to set a balanced budget for the year ahead.
This has been extremely challenging and the pressures remain on our finances as there is a predicted funding shortfall for 2024 to 2025 of around £40 million.
Using reserves is not a sustainable option although our call on reserves for the year ahead is around £10 million less than we had anticipated due to the announcement of extra funding for social care in late January 2024.
To address the funding gap without making an unsustainable call on reserves, in January 2024 we announced a number of budget savings proposals which form part of the budget-setting process agreed by our Full Council on 14 February 2024.
Many of the proposals will affect residents and some of our employees if they move forward as they could see some services changing, reducing or stopping.
Over the course of 2024 a number of these proposals will individually go back to our Cabinet for agreement to be sought to consult with residents who may be affected. Everyone who wants to will get the chance to have their say on any proposals which could see a service changed, reduced or stopped if agreed.
Some consultations have already been held and others are either about to be launched or in the pipeline, depending on agreement by our Cabinet.
The consultations currently running are:
You can see the budget saving proposals and the services which could be affected in the Revenue Budget Report 2024 to 2025 The budget that was set and agreed by our Full Council on 14 February 2024 included the budget savings proposals and a council tax rise of 4.99%, which for the first time in many years was the maximum rise allowed by government without triggering a local referendum.
The council tax rise raises an extra £19.5 million, with the 4.99% total made up of 2% to be directed to adult social care (known as the adult social care precept) and 2.99% for general council expenditure. It equates to a Band B household paying an extra £57.36 per year (£1.10 per week) and a Band D household paying an extra £73.75 per year (£1.42 per week).