A warning of cuts to services and job losses has been issued by South Gloucestershire Council after it revealed a £29.3million budget shortfall next year. The dire financial situation has been caused by an “unprecedented storm of global events” creating the cost-of-living crisis, as well as rising demand, especially in adult social care.
Papers going to cabinet on Monday, October 10, say the authority is being forced to find potential service changes or reductions, “some of which may result in redundancies at the council”. Projections show the deficit would rise to £32.8million in 2024/25 and £36.5million two years later, once previously agreed savings and the use of reserves have been implemented, despite councillors setting a four-year balanced budget as recently as February.
The grim forecast assumes council tax would increase by 1.99 per cent – the maximum allowed without a local referendum – plus one per cent ring-fenced for adult social care. A one per cent hike generates £1.6million for the organisation.
Read more: Inflation and demand for social care leaves Bristol City Council needing to find £31m
Surging energy costs will add £2million to the authority’s bills, with its two-year fixed rate tariff for gas and electricity coming to an end next April, with inflation expected to Increase running costs by another £10million to £15million. The nationally-negotiated pay offer for staff requires the council to find an extra £6.4million, while growing demand on existing services means costs to deliver these would go up by about £8.5million every year.
Capital costs – for large-scale projects such as roads, schools and other major one-off schemes – have already escalated and could continue to go up if soaring prices for materials do not reverse. The council says it is in a “relatively good starting position to manage the challenge”, but despite additional savings of £2.9 million identified this year, and £23.6 million of savings already in the pipeline, it now has to plug a £29.3 million gap in 2023/24.
Proposed services cuts and “income opportunities” are being developed to be presented to cabinet in December, followed by a public consultation on any changes. Council leader Conservative Cllr Toby Savage said: “We knew earlier in the year that financial pressure was building and our prudent financial management in recent years means that we begin this process from a position of relative strength, but an unprecedented storm of global events leading to the cost-of-living crisis, alongside rapidly increasing demand on council services, means we now have to look across the board at all service areas.
“This is something that councils the length and breadth of the country are all doing and, while we are in a relatively stronger position than many, this will still include things that affect our everyday lives. No one wants to have to do this and I’m acutely aware this comes at a time when people are increasingly struggling to make ends meet too.
“Support for people who need it most will be prioritised and we’re continuing to press our MPs and the Government for increased support for local authorities, to reform special educational needs and disability support and to fully fund the cost of care for our residents who need support. Because of the ongoing cost-of-living crisis, we know that any increase to council tax will be difficult for people and in setting the upcoming budget we will continue to do everything we can to minimise the impact on residents and staff.
“But the costs we are facing as a council are increasing by significantly greater degree than any increases to council tax being considered, and we are going to have to make some difficult choices.” Cabinet member for corporate resources Cllr Ben Burton said: “Our financial situation is unprecedented and we will need to reduce spending more significantly and more quickly than we have had to do in the past.
“We are a lean council and have a good track record for absorbing demand and inflationary growth by constantly improving the efficiency and value for money of the services we deliver for residents. By the start of the 2023/24 financial year, we will have already delivered £102million of savings by working tirelessly to realign our resources with council plan priorities.
“However, the current scale of challenge is too large and too urgent for this approach to be maintained and we now need to find ways to cut services or change how they are delivered. We will of course seek to do these in the least disruptive and detrimental way possible to continue supporting those in our communities who need it most.”
The cabinet report said: “The council continues to aim to minimise the number of redundancies through maximising opportunities to use natural turnover in the organisation coupled with skills development to move people between roles, wherever possible. However, it is recognised that this will not be possible in all instances and the council holds a level of funding to support potential severance costs.”
Local authorities are awaiting the outcome of the Government’s funding settlement later this year, which could improve the outlook. Full council will set the final budget in February.
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