A council tax rise of almost 3% would plug Sefton’s budget gap, according to a report released by Sefton Council this week.
In the report, produced ahead of a meeting of the council’s overview and scrutiny committee next week, Sefton Council has set out its budget plans for the coming year.
Overall, it states a budget shortfall of £4.3m before council tax rises are taken into account – a figure that would be matched by a full council tax rise of 2.99%
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The report details some of the budget pressures on the council, including fallout from the pandemic, with £1.4m of business rates “at risk.”
Losses at Bootle Strand Shopping Centre and delays with the council’s luxury housing company have also played a role in the council’s budget strain.
The report also refers to the huge ongoing and growing costs of adult social care which comprises over £100m of the council’s budget.
While some new funding allocated as part of the government’s recently announced financial settlement for local authorities by way of social care and ‘fair cost of care’ grants and one off funding to help mitigate planned national insurance rises, the council is also planning to press ahead with £3.8m of efficiency savings.
In order to try to reduce pressure on demand led services, including adult and children’s social care, the council said it will be focusing on early intervention and prevention programmes to reduce the number of people in need of services in the first place.
Problems with council owned companies are also adding to budget pressures.
Bootle Strand shopping centre’s precarious financial position is also contributing to the budget strains. After the council bought the shopping centre in 2017, it had been bringing revenue into the council, with around £1m raised until the pandemic hit.
However, since the pandemic, this situation has altered drastically, with losses of £1.7 in 2021/22 and £1.2m predicted for 2022/23, although the council said they expect this to reduce to £300,000 by 2023/24.
Delays in the completion of homes by the council owned luxury housing company Sandway Homes has meant that an anticipated £1.35m dividend has been put back until 2023/24, with the council also having recently agreed an £8.3m debt facility for the company.
In the report, officers said the council’s plans beyond 2022/23 are mired in uncertainty, largely due to the government’s reliance on short term funding initiatives.
When the government released financial settlement details for local authorities in December last year, this was only for 2022/23 with no details provided for future years, also making it “incredibly difficult” for the council to plan ahead.
The report said that while setting multi-year budgets has enabled the council to balance its books and continue providing key services in recent years, the government’s approach “due to the national political agenda, COVID-19, and the lack of progress on key financial reforms leaves local government and Sefton in a vulnerable position as this medium-term planning is not possible.”
The report says the situation is “compounded” by 12 years of austerity which has left Sefton Council dealing with a £233m budget shortfall.
It adds that despite claims of a new “economic decade” and an end to austerity in 2019, events of recent years, in particular the pandemic and a shaky economic outlook means that “great uncertainty” continues to exist as to whether adequate funding will be provided in future years.
Members of the overview and scrutiny committee will be asked to consider the report and make recommendations before the council’s budget is discussed by cabinet on February 10, with a full council budget meeting due to take place on March 3.
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