Estimates show that PվɫƬ will have a funding gap of more than £42 million between 2021 and 2026.
Its funding gap for next year alone, 2021/22, is estimated at nearly £6.7 million. This is before considering the financial pressures of responding to COVID-19, currently estimated at £4.0 million in 2020/21 after already identifying internal savings of £1.3 million.
A report going to the council’s Business Continuity Committee (BCC) next week outlines key challenges in setting the council’s budget:
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Savings can only be made from a small number of council services (32%)
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Most (68%) of the council’s expenditure is ring-fenced by national priorities or controlled by external factors:
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Teacher posts are protected nationally
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Social work costs are managed by the Health and Social Care Partnership
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Utility, loan and other costs depend on external factors.
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The report sets out a proposal for a themed approach to identifying savings that would involve members of the public earlier in the budget-setting process.
This would see relevant council services looking at whether they could make savings by working differently, or by working together and with partners, based on these themes: working digitally, amenity, leisure, fleet and transport services.
Reviews of these areas of work would involve the public in identifying possible savings options. Processes for public involvement would take COVID-19 health restrictions into account.
The proposed approach also expects all areas of the council’s work to look for further efficiencies.
Councillor Gary Mulvaney, Policy Lead for Strategic Finance said:
“Over the past the few years we have already had to take more than £50 million out of the budget. Every year it becomes more difficult to find even more savings.
For more savings to be possible, we need to take a new approach to how we look at budgeting. And with so much of our budget unavailable for savings, we have to focus on the areas of work that we can control.
At a time when our employees are working so hard to provide essential support to communities and businesses affected by the COVID-19 pandemic, it is especially difficult to be considering again how we can make yet more changes and meet yet another savings target.
We must however set a balanced budget for the council in February next year.
This proposed approach will be considered fully when the Business Continuity Committee meets next week.”
The BCC will also consider a separate report on the budget pressures for the council arising from its work to support communities deal with the impact of COVID-19.