Cabinet to consider proposals to plug in-year financial shortfall

This year’s budget, agreed in February, identified more than £27million in savings in the 2016/17 financial year. More than 84% of savings for this year have already been achieved or are on track. Increasing demand in the council’s adults’ and children’s social services as well as pressures arising from expensive temporary accommodation costs have resulted in the shortfall.  Extra provision has already been built into next year’s budget to help meet this demand.

The council has already created a special £5million social care transformation fund to redesign services so that fewer people need intensive help in the future and agreed last year to allocate £2.3million extra for social care in 2016/17 rising to £4million by 2019/20, but that is still not enough to meet demand.

In addition to using money from the council’s reserves and contingency budgets, additional savings and efficiencies are being sought across the council to mitigate the additional social care pressures the council is currently facing.

Through prudent management the council has added to its reserves in recent years as part of managing the extensive funding cuts from central government.

The council is also continuing its efforts to boost the local economy in an effort to increase business rates, while creating much needed homes which has also increased revenue through council tax to help to balance the budget. 

Leader of the council, Julian Bell, said: “We are facing unpredicted demand on our social care and housing services as the severe cuts from central government continue to take effect.  Reports in the media last week estimated a £2billion ‘black hole’ in local government funding in London in the next two years, along with a further reduction to core funding of 37% in real terms over the next four years.

“Despite these difficult times we’ve been determined to do all we can not to pass this burden on to residents and have frozen council tax for the eighth consecutive year.  We have also been careful in building our reserves in anticipation for tough times and now we must act to help our most vulnerable residents and deal with the devastating outcome of diminishing central government funding.”  

Councillor Yvonne Johnson, cabinet member for finance, performance and customer services, said: “Funding cuts on the scale that we have seen are increasingly difficult to deal with and this will only become harder as further options for identifying savings become exhausted. The challenges we are facing are amplified by a booming population and higher care and housing costs than in other parts of the country. 

“We have been saying for a number of years that it is important to build our reserves for unexpected demands on our finances and, unfortunately, the time has come when we have to call on these finances in order to do the right thing for all of our residents.”

The proposals will be considered at Cabinet on Tuesday, 18 October and decisions are subject to call-in for a period of five working days from the date of publication of the minutes of the meeting.