Council faces budget challenge as financial pressures worsen

11:38am - 01 September 2022

North Somerset Council faces increasingly tough decisions to set a balanced budget for the financial year ahead with a £17m gap to close – about 10 per cent of its net budget.

The council’s Executive will meet next week for the first in a series of formal meetings to discuss, develop and agree the organisation’s medium term financial plan and Council budget for 2023/24.

In common with businesses and households, the council is seeing its own costs rise steeply with increasing energy prices and sharp inflationary rises in many areas. These cost increases, coupled with the increasing and sustained demand for services are placing already constrained finances under such pressure that service reduction is fast becoming inevitable in the year ahead.

The council has already made significant savings over the last 13 years of austerity. Additional funding allocations from central government to support covid recovery have come to an end and have not been replaced with revised measures to help tackle the inflationary increases. This means the council is having to make budget preparations for the year ahead with no certainty of the amounts of funding it will receive to support service delivery.

Cllr Ash Cartman, the council’s executive member for finance said: “The financial challenge we face eclipses anything we’ve seen til now. Against a history of keeping council tax increases among the lowest in the region for many years, our base funding levels have always given us significant budgetary challenges compared with our neighbours, but this year takes things to a new level.

“There is no money down the back of the sofa, and none forthcoming from central government to help councils with massive inflationary impacts. Belts have been tightened for a long time and we are running out of options to set a balanced budget for the year ahead.

"The government needs to act to support local services and help us to manage the exceptional inflationary and demographic pressures we are facing. Only with fair long-term funding and the right powers can councils deliver for our communities."

Next week’s meeting will be the first opportunity for councillors to discuss the budget challenge in a public forum, and more meetings will take place over the autumn and winter enabling democratic decisions to set a balanced budget for the financial year ahead.

Cllr Cartman added: “We have more work to do over the autumn to develop budget proposals for the year ahead, but given the scale of the challenge, we are considering significant reductions to service delivery in some areas – regrettably, that’s inevitable in the current climate.

“I just think it’s important that we share this news now, and begin to have the difficult conversations about the measures we’ll need to take to balance our books. We want this to be an open and transparent process.”

The first report to be discussed by councillors to develop budget proposals for the year ahead will be presented at next week’s Executive meeting on Wednesday 7 September, starting at 6pm. The report is available along with the agenda and other papers on the council’s website. The meeting is open to the public and also available to watch on the council’s YouTube channel.