Cambs budget up for discussion
It could see a council tax hike for Wisbech
Cambridgeshire County Council meets today (9 Feb) to set its budget for the year ahead, aiming to close a projected £9.6m budget gap, and agreeing a new five-year business plan - all under the shadow of the current global pandemic.
A report to Members from Chris Malyon, Deputy Chief Executive and Chief Finance Officer, published here as part of the Full Council agenda, confirms that in February of last year the Council set a balanced budget for the current year, using none of its reserves, and in addition being able to make further investments in measures to transform its services. At that point the Council was in a very robust financial position with only an expected £4.2m 'budget gap' for 2021-22. This was much less than in previous years.
He said:
"Since (the global pandemic began in) March 2020, we have continually developed our understanding of emerging trends, actual demand increases and emerging impacts on society and the economy. This has enabled us to narrow the range of the predicted budget gap and present options for a robust budget for 2021-22."
His paper goes on to set out the current financial situation of the council, and the options open to Members to set a balanced budget which every council must do before March 1. At the meeting each of the political groups have the opportunity to present their own amendments to the budget considered by the Council's General Purposes Committee in January. These amendments will be debated and then voted on.
For 2021-22, Cambridgeshire is set to receive £645m of funding, excluding grants retained by its schools. But its total expected spending 2021-22 - despite finding savings and additional income of £4m, will be £655m - leaving a £9.612m gap.
Further gaps are also identified in the next four years of the plan - based on information on the latest projections of expected demand pressures.
The costs of running the Council have risen by £42m (6.9%) compared to the last financial year. In particular, the impact of COVID-19 has led to increased challenges across all services areas but especially in Adult's and Children's Social care which have seen increases in both the amount and complexity of need.
A significant amount of activity has been undertaken to identify savings, efficiencies and income to reduce the current gap. However, the opportunities to generate additional savings proposals without significantly impacting the delivery of services, the paper confirms, have reduced in both number and scale.
Mr Malyon sets out a range of other options which remain available to close the gap for Members to consider which include:
Increasing the rate at which base Council Tax is set - the government has confirmed councils have freedom to raise council tax by up to 1.99% each year without triggering a local referendum. Each additional 1% added to the council tax bill would bring in just over £3m per year.
Increasing the rate at which the Adult Social Care Precept is set. The council's current Business Plan is currently based on the council being able to set an Adult Social Care precept of 2% in each of the five years that the plan covers to 2025 - 26.
Each additional 2% added to the council tax bill costs the average Band D Council an additional £27.18 a year.
Use of the flexibility available around Minimum Revenue Provision (MRP) - extending the amount of time the council has to pay back money it is borrowing and thereby reducing annual cost of that borrowing. A restructuring of the MRP in 2015 led to the creation of the transformation fund.
Use of the Transformation Fund - money previously set aside each year to transform services across the council to work more efficiently and effectively for local residents. There is currently £23m in the fund.
Reduce service levels
A further option of using the council's general reserve is also highlighted in the report - although at 3% of the overall budget, the reserve is currently held at the minimum level which is currently considered prudent and therefore should only be used as a last resort to balance the budget.