Cabinet has tonight (Wednesday, 7 June 2023) received confirmation that Knowsley Council achieved a balanced budget position for the 2022/2023 financial year, as well as receiving an update on the impact that high levels of inflation, the cost of living crisis and reduced Government funding has had on the budget.
The impact of inflation has added £5.4m to the Council’s costs during 2022/23 and the Council’s funding from the Government was far short of covering the full impact of price and wage inflation and the increasing demand for public services.
If Knowsley’s funding had kept pace with inflation and demand over the last 10 years, the Council would be receiving around £55m more per year in Government funding than is currently the case.
Whilst the Council is reporting a balanced budget, there are still a number of significant issues to be addressed. This includes:
- Increases in expenditure on placements for looked after children as a result of additional demand, complexity, and costs of placements.
- Increased spending on home to school transport provision as a result of additional demand and increased costs.
- A deficit in respect of the School Meals service due to the impact of price inflation on the cost of provisions and increased meal numbers identified in the last quarter of the year.
- A significant level of unfilled vacant posts across the Council due to ongoing difficulties in recruitment (particularly in Adult Social Care and Children’s Social Care).
Despite these challenges, the Council has reported a balanced budget, achieved through robust financial management, freezes on expenditure in certain areas and the allocation of £1.647m of one-off resources.
The Council moves into the 2023/2024 financial year with further pressures to address – not least the impact of any unfunded element of the 2023/24 local government pay award.
Knowsley, alongside other local authorities, will be lobbying the Government to provide additional grant funding to meet the eventual pay award, which will undoubtedly exceed the budget provision agreed in March 2023.
Cllr Jayne Aston, Cabinet Member for Resources, said “Despite the significant challenges we have faced, I’m incredibly proud that we achieved a balanced budget position for 2022/2023.
“This doesn’t happen by chance – and it’s thanks to robust financial management, strict controls and monitoring that we are in this position.
“Our budget pressures don’t end here as we start a new financial year with yet more significant pressures ahead of us.
“However, we will continue to ensure that our funding is prioritised to support our communities by providing the support and services that they value and need.”