Reports outlining the financial challenges facing Bath and North East Somerset Council are to go before the cabinet on Thursday 9 November.
A number of factors including rising inflation, increasing wage, energy and fuel costs, and continued rising demand for essential adult and children’s social care services are putting increasing pressure on the council’s budgets.
The report monitoring the Council’s finances from April to September this year draws attention to increases in temporary accommodation costs, additional demand and costs for Home to School Transport, and increased costs coupled with reduced income in the Commercial Estate.
Additional income from Parking Services, the Roman Baths and Corporate Budgets - as a result of high summer visitor numbers, and increased investment interest have helped to offset some of these impacts. The report shows that £10.6m of savings have been delivered against a target of £14.4m savings and income generation plans that were included in the 2023/24 budget.
However, the report shows an overall projected overspend of £6.5m against the revised 2023/24 budget of £135.06m.
Councillors will also consider the Medium Term Financial Strategy (MTFS), which provides the longer-term framework for the council’s budget setting. It sets out the council’s current financial position, the challenges it faces and its strategy for addressing the funding gap.
Estimates show the Council will need to find a further £35.3m, including the £1.74m already identified, over the next five years. This is based on the assumption that Council Tax increases of 4.99%, including 2% for the Adult Social Care Precept, remain for the period to 2024/25, with Council Tax reverting to 1.99% from 2025/26.
In the shorter term, £23.19m of savings will need to be found over the next two years.
Councillor Mark Elliott, cabinet member for Resources, said: “Bath & North East Somerset Council has managed its finances very capably and cautiously, with well controlled spending and no high-risk investments. Despite that these reports show the significant pressure we face as a result of reduced government funding, the longer term impacts of Covid-19 and spiralling inflation.
“The reports estimate we will need to find £35.3m in savings over the next five years as well as generate additional income and the Medium Term Financial Strategy sets out the scope of the work that is ongoing to meet that those targets. With services that are already stretched, the efficiencies required are extremely challenging, however I want to reassure residents we have the capability and expertise to manage this situation. We remain focused on delivering services, supporting the most vulnerable in our community and delivering on the priorities we put before residents at the election in May, which they so comprehensively supported.”
The Revenue and Capital Budget Monitoring, Cash Limits and Virements – April 2023 to September 2023 report to cabinet and the Medium Term Financial Strategy 2024/25 – 2028/29 are on the council website
The cabinet meeting on Thursday 9 November will take place at 6.30pm. You can watch live on the Council's YouTube channel.
The council’s budget for 2024/25 will be considered at the February 8 cabinet meeting and taken to Council for a decision on February 20 when the council tax will be set.