Hikes and spending cuts needed to balance East Riding Council finances
The authority's Head of Finance says it's to avert an East Riding budget black hole
Council tax hikes of 3.99 per cent and parking charges and housing rent rises will be needed to avert an East Riding budget black hole, its finance lead has said.
East Riding Council’s Head of Finance Julian Neilson told councillors the authority’s budget would be balanced this coming financial year, but only with the hikes and spending cuts.
The officer told the Overview Management and Scrutiny Committee an increase in council house rents to ÂŁ84.83 a week, up by ÂŁ3.59, was among the options being looked at.
It comes as Mr Neilson told councillors extra coronavirus spending, high inflation and increases in costs forecast for some council services meant budget gaps could open in the coming years.
Councillors heard the increasing pressures meant the East Riding would be spending an extra ÂŁ37.7m this coming financial year, even with around ÂŁ20m in government support for coronavirus factored in.
Mr Neilson said pressure on council budgets would add up to ÂŁ90m in the next four years, falling to ÂŁ57m if some ÂŁ33m in savings officers have proposed are made.
The committee heard council tax payments were returning to normal levels faster than expected as the economy bounces back from the pandemic and less people require rate relief.
But they also heard the budget would only balance with a 3.99 per cent hike and forecasts assumed 3 per cent increases in coming years.
Mr Neilson said hikes in charges for council car parks would be the first time they had risen since 2010.
Mr Neilson and council children’s lead Eoin Rush said officials were also looking at moving its School Music Service to a trust model to better access grants and other funding.
But councillors heard the hikes, changes and spending on projects to generate more income would still leave East Riding’s budget with a £10.6m gap by 2023-24 and £9.9m by 2025-26.
Council forecasts show adult social care costs alone could rise by ÂŁ23.7m as inflation and energy bill hikes push outgoings up for providers.
Council plans to raise the minimum wage for care workers by ÂŁ1 above national increases to ÂŁ10.50 an hour are expected to cost ÂŁ4.2m.
Mr Neilson said ongoing economic uncertainty meant it was difficult to predict how budgets would look in the years to come.
He added that while many issues such as social care were affecting councils across the country, the East Riding’s more elderly population meant pressures were more severe locally.
Mr Neilson said: “In the coming years we’ll face some of the largest financial pressures we’ve ever seen.
“Spending on high needs in education is forecast to raise by 13 per cent in recognition of significant demand increases.
“We’re aiming to reduce the need for intense interventions for special educational needs and disability (SEND) children.
“Two thirds of our council house tenants receive housing benefits which will be uplifted if we increase rents.
“Social care staff are leaving the sector meaning less residential and home care provision can be offered while demand is increasing.
“We’re investing £6m in the long term in the council’s Your Life, Your Way programme to focus more on early intervention and prevent a reliance on long term care.
“The 4.1 per cent increase in rents for 2022-23 would come as the council aims to build 1.000 new affordable homes over the next five years.
“The proposal to move the School Music Service to a trust model could help it become self-funding and create more cultural opportunities for residents.”