Essex County Council facing £14m budget gap amid rising inflation and costs
The UK’s inflation rate hit 10.1% on Wednesday
Last updated 21st Oct 2022
An Essex council has reported a £14million gap in its budget, amid record high inflation and rising costs.
An Essex County Council report forecast a minor over spend of £2.9m against a net revenue budget of £1.1billion, but said the underlying over spend is closer to £14m.
Councillors said 40-year high inflation and rising interest rates have affected the council’s costs, including in construction and social services, at a cabinet meeting on October 18.
Council leader Kevin Bentley (Con, Stanway and Pyefleet) said the authority faced huge challenges, but that this was not down to poor management.
He said: “Like all other authorities and certainly the government as well, we are facing financial uncertainty. We are not immune from that.”
The cabinet voted to draw one-off funding from the council’s reserves to manage the pressures, including £2.7m from the Covid Equalisation Reserve for covid-related costs and £1.8m from the Transformation Reserve.
According to the report, the latter figure includes £917,000 to reimburse bus service operators for losses caused by a drop in passenger numbers.
Additionally, £550,000 will be drawn from the Adult Social Care Risk Reserve to be spent on short stay isolation beds for older adults.
£344,000 will be used by the Tendring Multi-Disciplinary Team to continue funding the pilot project in that region, drawn from Children’s Transformation Reserve.
The UK’s inflation rate hit 10.1 per cent on Wednesday (October 19), the fastest rate in 40 years. The Bank of England also raised interest rates to 2.25% last month, the highest level in 14 years.