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Cabinet updated on financial forecasts

by Jonathan Kearney

Cabinet has tonight received an update on the Council’s medium-term financial strategy and current year budget monitoring position.

A balanced budget for 2023/2024 was set earlier this year in March 2023, however since then, the Council has experienced major financial challenges and pressures in a number of areas including Children’s Social Care, Home to School Transport provision, Homeless Accommodation, and the impact of the unfunded element of the 2023 Local Government Pay Award.

The forecast £5m deficit caused by these pressures for 2023/2024 will have to be balanced by allocating one-off resources which the Council set aside for such purposes when it set its 2023/2024 budget. The Council’s robust financial management processes already operate a ‘non-essential spend’ model to help mitigate the impact of these pressures.

These pressures will continue in the coming years and the Council is facing a much more challenging financial climate.

Cllr Jayne Aston, Cabinet Member for Resources, said: “Without significantly increased Government funding, the Council will face growing budget shortfalls in the coming years. The demand for our services is increasing, but Government funding does not support this increased demand.”

“Local Government is significantly underfunded. We have urged the Government to ensure that forthcoming funding allocations properly reflect actual price and wage inflation as well as increased levels of demand.

“There is still considerable uncertainty regarding the Government’s short-term approach to local government funding in the coming years and this uncertainty makes it extremely difficult to plan over the medium-term. It is hoped that Government announcements over the coming weeks will provide some degree of clarity.”

In order to address longer-term financial challenges in Adult Social Care, Cabinet has endorsed an ‘invest to save’ proposal to reallocate one-off reserves of £0.934m which will release £6.154m of permanent savings over the next three years. This includes increasing the capacity in Adult Social Care to support targeted reviews, rolling out assistive technology to support residents in their own homes and investment in moving with dignity equipment which would reduce the dependency on multiple carers and support residents’ independence.

The current forecast for 2024/2025 is a potential deficit of £5.2m, with further deficits forecast in future years (£8.3m in 2025/2026 and £11.2m in 2026/2027).

Depending on a number of factors, including confirmation of Government funding and demand for Council services, the budget setting process for 2024/2025 will need to meet these forecasts by including savings options which could impact on service delivery. Work is already underway on where savings can be made across the Council.

Cllr Jayne Aston added: “We will continue to lobby the Government for fairer funding.  Funding should be aligned to needs rather than postcodes and we are doing all that we can to minimise the impact of any funding shortfalls, but we do know that we have a challenging few years ahead.”