23 Nov 2023
Is the district council’s cash crisis even worse than we previously imagined?
New details surrounding SADC’s finances have emerged in the agenda notes for a meeting of the strategy and resources committee.
According to these notes, SADC has a budget gap of £2.95m in 2024/25, caused by various factors including a loss of anticipated revenue from the long-overdue Jubilee Square project.
Internal budget saving meetings have worked out how to save £1,448,000 by increasing prices and unidentified “income opportunities”, plus cost savings and efficiencies. What service cuts are being considered have yet to be disclosed, but something drastic is surely required to make up the £1,502,000 shortfall?
We asked Suzanne Jones, SADC strategic director for customer, business and corporate support, to explain the situation and elaborate on the next steps to be taken.
She said: “Like many other councils, we are faced with a challenging financial climate which has included high inflation at time when demand for services has been rising. This is making it increasingly difficult to fulfil our statutory duty of producing a balanced budget where spending is matched by income and appropriate use of reserves.
“The District Councils’ Network, which represents 167 local authorities, recently highlighted this nationwide issue in a survey.
“Its research predicted a total budget shortfall of district councils around the country of £550m in 2023/24 and of £610 million in 2024-25.”
Turning specifically to SADC, and the budget for 2023/24, she said the latest forecast for the current financial year is an overspend of £900,000 as published in a report to the November strategy and resources committee.
“This is down from the September forecast of £1,056,000, due to a concerted effort across the council to reduce spending.
“We are continuing with this effort and expect to further reduce the overspend forecast.
“We had expected to receive £640,000 in rental income from Jubilee Square’s commercial space. The building has not been completed yet and our budget planning now takes account of this.”
But what of next year?
“The budget gap for the financial year 2024/25 is currently estimated at £2.9 million. It is only an estimate as there is uncertainty over the impact of inflation, pay agreements and Government funding.
“The report to the November meeting of the strategy and resources committee outlines options to be considered to reduce the budget gap by £1,448,000. The report is clear that there is still work to be done to identify further savings or income gains.”
SADC is now working to a published timetable for setting the 2024/25 budget. This month, councillors on the four service and scrutiny committees have been looking at the overall situation, Suzanne explained.
“Next month, the Government is due to publish the Provisional Local Government Finance Settlement and we will discover what funding we will actually receive.
“This will provide greater clarity for our forward planning,” she said.
“In the New Year, committees are scheduled to agree their budget proposals with the strategy and resources committee putting forward the final proposals to the February meeting of the Full Council.
“Full Council then has to agree a balanced budget, the Council Tax precept and rent increase for our social housing properties.”
Last year’s measures included closing Abbey View Golf Course, charging residents to visit Verulamium Museum and raising car parking charges. Quite what will be on the agenda in order to balance next year’s budget remains uncertain, but councillors on the ruling Liberal Democrat administration could be left with a bitter pill to swallow.
