Squeezed budgets
IHigh inflation means that councils having to pay more to run services, just like that same inflation is affecting all of our household budgets.
The cost of living means more people are approaching their local councils for support.
It’s a heady mixture when it comes to local authority balance sheets.
In Reading, latest projections show the Council expects to pay an extra £20.6 million next year to deliver the services so many people rely on.
The nature of what councils do means it is often the most vulnerable residents in society who lean on us most heavily for support. Nobody is arguing local councils should not be delivering essential services like caring for adults or children – far from it, those are the fundamentals.
What is sobering, however, is that the percentage of Reading’s overall budget spent on social care now stands at 68%.
Breaking that £20.6 million figure down by its major contributors, stubbornly high inflation means we are having to find another £5.5 million next year for adult social care, and another £1.1 million to cover extra costs in waste disposal. We’ve also had to budget £7.4 million extra to pay for children’s social care, with more children in need of care, more family referrals, and an increase in the complexity of individual cases.
The cost of living crisis means we also need to find another £1 million to pay for homeless prevention services next year. As people struggle financially, private sector evictions increase and it falls to the Council to pay for more emergency housing.
Fourteen years of Conservative cuts to public services means preventative services have been cut to the bone. Coupled with more people now living in poverty, a larger cross section of society now needs support.
All of this is compounded by a continuation of a head-in-the-sand approach from Westminster as public services everywhere, not just councils, groan under the strain of a faltering economy and failures of public policy.
If ever you were in any doubt about the impact national politics has on local council finances, especially in an election year, you’ll recall that Michael Gove suddenly found an extra £600 million for local government after
46 Conservative MPs wrote to the Prime Minister asking for bailouts to save their own local councils from going bust (which wouldn’t have been a good look at the forthcoming General Election).
Reading’s share of this much-heralded pot of gold is £1.7 million. For context, I remind you again of the extra £20.6 million we have had to find to keep essential services running next year.
Despite the obvious challenges, many years of prudent financial planning means we are in a better financial position than many other councils and, indeed, many of our near neighbours.
Our proposed budget outlines the intention of the Council to continue investing in better facilities for residents, whether that is a record investment in new road surfaces; even more new leisure facilities; a brand new Central Library and Hexagon Studio theatre; more money towards realistic sustainable transport; modern new sheltered housing for older and vulnerable residents; and a continuation of our programme to provide 400 affordable new homes by 2025.
We could not envisage making those investments if we were not in a financially stable position, but that doesn’t mean that the outlook for local councils, and their essential services, across Britain is not of huge concern.