Austerity ‘over’ but councils still having to save £100m
councils say they need to make a total of nearly £100 million of future savings – despite the Chancellor stating in his recent Budget address that “austerity is coming to an end”.
The cuts in public funding aimed at reducing the nation’s deficit have been dubbed “austerity”. They were begun in 2010 by the coalition government led by David Cameron.
At the start of this year, Derbyshire County Council had put forward plans to cut £53 million from its budget by 2022. By September, this had shot up to £70 million, taking the total it will have saved between the start of austerity and 2022 to £327 million. Its total budget for the current year is £503.2 million.
Earlier this month, High Peak Labour MP Ruth George queried Government claims that there had been “real-term” increases in council budgets.
In response, Housing Minister James Brokenshire said: “I recognise the challenges local government has faced over the past few years and how councils have played their part in dealing with public finance challenges.”
He said investment was being made to “create a sustainable position for local government”. A spokesperson for the department said it was working with local authorities to “develop a funding system for the future based on the needs of different areas”.
The county council is proposing cuts of £18.5 million next year as it bids to make £70 million savings. The authority’s director of finance, Peter Handford, said the council “continues to face significant cost pressures”.
In July, he emphasised the need to keep on top of its savings targets. He said: “We face a tough balance as an authority of resources versus our revenue budget. We have had to use £18 million from our reserves to ease some of the pressures, but the difficulty will be continuing – I really can’t underemphasise that at all.”
Derbyshire Dales District Council’s spending power has been reduced by £287,000 since last year. It is predicting a further reduction of £350,000 next year – and savings have been allocated to cover that.
Until 2020, the authority must find a further £800,000 in savings. Its total budget this year is £35.8 million.
At Amber Valley Borough Council, a spokesperson says the authority has been affected by the removal of the Revenue Support Grant from central government. This will see £3.6 million cut between 2017 and 2020.
The authority has already achieved half this saving, £1.8 million. Its budget this year is £52.1 million.
South Derbyshire District Council is looking to cater for its future funding deficits by drawing on its reserves – which are at “healthy” level.
It is forecasting a deficit of £723,481 for next year, with a total cumulative SHORTDERBYSHIRE fall of £1.3 million predicted up to 2023. This will have a dramatic impact on the level of its general reserve, which would fall from £9 million this year, to £7.5 million next year, and to £2.2 million in 2023. However, this remains above the minimum level of £1.5 million.
This strategy has been judged to be “high risk” by the council’s director of finance and corporate services, Kevin Stackhouse. He said: “The deficits in future years were projected to be significant. If no action was taken to reduce future deficits, it could quickly de-stabilise the financial position as any action to achieve budget savings may take time to fully implement.” The authority had a surplus of £778,399 this year.
Mr Stackhouse says the current forecast is “worst-case” and will be subject to changes, due to any Brexit fallout and general changes in government policy.
He says the funding position is updated throughout the year and the authority is always looking to plan at least two full years ahead.
He says that the council’s revenue is set to grow as a result of new housing in the district. The council’s total budget this year is £45 million.
A Ministry of Housing, Communities and Local Government spokesperson said: “Councils in Derbyshire will have access to over £1.4 billion this year and next, which they should use to meet the needs of their residents.
“We are investing in Britain’s future, and in Budget we announced more than £1 billion in extra funding.
“On top of this, we’re giving councils the power to retain the growth in business rates income.”