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£51.8m ‘budget pressures’ as council cabinet considers new financial proposals
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£51.8m ‘budget pressures’ as council cabinet considers new financial proposals

February 6th, 2024 Martin Walker News 0 comments 766

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Leaders of Durham County Councilv will consider the authority’s budget plans for 2024/25 when they meet next week.

The authority’s cabinet will consider the council’s final draft budget proposals before making recommendations for consideration by full council at the end of February.

At next week’s meeting, Cabinet will hear the council is facing £51.8m of unavoidable base budget pressures in 2024/25 due to the impact of inflation, increased costs relating to looked after children, adult social care, and home to school transport, as well as the impact of a loss of housing benefit subsidy linked to temporary accommodation and supported housing.

Cabinet will be recommended to approve savings options totalling £8m for 2024/25, and £16.4m across the four-year Medium Term Financial Plan (MTFP) period.

The majority of the proposed savings were presented to Cabinet in July and October 2023 and subject to public consultation.

To help meet the significant cost pressures in this budget, a 2.99 per cent increase in base council tax and 2 per cent increase in the adult social care precept, totalling 4.99 per cent, has been proposed to protect frontline services and help meet the unavoidable cost pressures facing the council.

This will require the approval of full council on 28 February 2024. The Government’s published Core Spending Power figures for all local authorities assumes that local authorities will increase council tax by this amount.

The overall increase in council tax, if approved, including resources generated from the adult social care precept, will generate an additional income of around £13.35m next year, as compared to the £51.8m of budget pressures faced.

The proposed increase equates to an increase of £1.15 per week for the majority of council taxpayers in the county, who live in a Band A property, with a £1.76 per week increase for Band D properties.

The most financially vulnerable would continue to be protected by the council’s Local Council Tax Support Scheme, through which over 81 per cent of eligible households will continue to be awarded 100 per cent relief and pay no council tax, as well as the support available through the council’s welfare assistance programme.

The report to Cabinet outlines that, although savings of £8m are recommended for 2024/25 and a council tax increase is proposed, there will still be a need to use £3.8m of the MTFP Support Reserve to balance the 2024/25 budget.

This would be a short-term solution to provide time to develop sustainable budget savings for 2025/26, where the council is forecasting a significant funding shortfall which will require the delivery of £16.8m of additional savings to balance the budget.

Cllr Richard Bell, deputy leader of Durham County Council and Cabinet member for finance, said: “Cabinet is committed to strong financial governance and getting value for public money whilst ensuring that the council sets a sustainable balanced budget with any council tax increases being justified and affordable.

“Through prudent financial management, the council is not in the position that many others across the sector find themselves in at this time, but we are not immune from the financial crisis that besets many other councils.

“Both the council and the County Councils Network have been lobbying Government for some time for extra funding, and it is pleasing to see that they have responded with the additional funding announced on 24 January of an estimated £5.88m social care grant.”

The council continues to prioritise investment in the county through its capital programme, including:

• An additional £10m to the Greenfield School scheme bringing total investment to over £20m.
• Investment of the £14.8m Local Transport Plan (LTP) government grant in highways maintenance, supplemented with an additional £5m from the council.
• A £5m budget to repair bridges and structures across the county.
• An additional £2m allocation for building investment to enable the council to meet its net zero targets.

However, Cabinet will be advised that maintaining capital expenditure at this level will not be possible in future budget rounds.

Cabinet will hear more details when it meets on Wednesday, February 14.

 

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