CITY COUNCIL SET FOR £19M SPENDING CUT AS INFLATION ROCKETS
Housing firm biggest loser as authority reduces outlay
MORE than £19 million is set to be slashed from a council’s spending plans – as rocketing inflation and interest rates make some schemes unaffordable.
Stoke-on-trent City Council is reducing its outlay on several projects in its capital programme – with others removed altogether.
High inflation is pushing up the cost of construction across the country. And although external funding has been secured for some schemes, many also require large amounts of borrowing – which will be more expensive with higher interest rates.
Some of the biggest affected capital schemes include the Ceramic Valley Enterprise Zone (removal of £3.3 million of spending in 2023/24), City Centre Access (£2.5 million reduction) and Fortior Homes, the council’s private sector housing company, which will see its funding cut by £7.8 million.
Smaller reductions will be made to the King’s Hall renovation (£300,000), museum enhancements (£281,000) and pay and display machine modernisation (£80,000).
Other projects, such as the council’s three Levelling Up Fund schemes and the District Heat Network, will see some spending scheduled for this year pushed back to 2023/24. But an extra £4.5 million of spending is being proposed for ‘Market Housing, Site Design and Delivery’, which will pay for surveys and remediation work for housing development sites.
The overall impact of the proposed changes will see the capital programme cut from £855 million to £840.8 million, with a £14.5 million reduction in planned general fund borrowing.
Cabinet members were yesterday due to be asked to recommend the changes for approval by the full council.
The report to cabinet states:
“Rising inflation and interest rates are impacting on the capital programme when there is a need for capital investment in the city’s infrastructure to attract businesses and jobs, and make it a better place to live.
“These increases led to a detailed and challenging review of the capital programme, excluding schemes that are nearing completion or are fully grant funded, to potentially reduce or remove schemes.”
Council leader Abi Brown was quizzed about the inflationary pressures facing the capital programme, and the council’s response, by members of the strategy and resources scrutiny committee.
She told the committee she would continue to lobby ministers for increased funding for capital projects. And while she explained some projects would see spending cut or delayed, the council was keen to press ahead with others, such as The Goods Yard redevelopment next to Stoke Station.
Mrs Brown, below, said: “We have a range of choices. We can choose not to do things, we can choose to re-phase them, or we can choose to move ahead. All of those options are on the table, but clearly with some of these projects we need to move forward.
“I’m very strongly committed, as are my cabinet, to improving housing provision in the city.
“I believe that while we may need to pay more, that’s really important. I’m not happy with some of the things that are there. So there’s a clear steer that yes, things may cost a bit more, but there are things that are really important to us. Equally there are other projects where maybe it isn’t so fundamental that we do them now, or we could reconsider how we phase them.
“With the Goods Yard, we felt we’d gone so far down the road, while there may be inflationary pressures, if we didn’t act promptly what sort of message would that send about the ambition of this city and this council.”