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Essex County Council warn of difficult budget choices ahead

News / Thu 14th Dec 2023 at 08:09am

ESSEX County Council has warned of  ‘difficult choices’ ahead as it says the budget for the next financial year “won’t be easy”. The council leader has also warned the Government that ECC’s financial position was significantly worse than before the Government’s autumn statement.

The council will find out later this month the details of the Government settlement. But the council has already said it needs to mitigate against a backdrop of an increasingly widening budget gap for the council – expected to be £19m in 2024/25 rising to £75m by 2026/27, before further tax rises.

The IFS reported there was nothing to help with the spiralling costs of children’s services and nothing new to support adult social care services through the coming winter in the autumn statement.

The IFS adds that despite rhetoric from the chancellor on the cost of living, the household support fund is still set to end in March, although a last-minute extension of the Spring budget is still possible.

They add the substantial 10 per cent rise in the National Living Wage – while welcome news for workers – will add to pressure on adult social care budgets.

Essex County Council says the half-year stage of 2023/24 highlights that, while there is a small forecast overspend of 1.2 per cent against a net revenue budget of £1.1bn, the short to medium term outlook remains “incredibly challenging, with demand uncertainty, market pressures, high inflation and interest rates, and cost of living impacts”.

The 2024/25 budget proposals are due to be published on Monday, January 8, before being discussed at a Cabinet Meeting on Tuesday, January 16. They will then be debated at Full Council on Tuesday, February. 13

Councillor Chris Whitbread, cabinet member for finance, said at Full Council on December 12: “I am not going to pretend to you when I stand before full council on February 13 when I deliver the budget, that it will be an easy budget. It won’t.

“But what I will tell you is we have been working on the budget since we put the last one to bed and it will be the best budget we can do for Essex in the current circumstances.

“It will also protect those things we value and care about and it will start to put in place more of what we want to in the future.”

The budget proposals will be informed by feedback given by residents and businesses in an online consultation. A total of 2,159 residents responded to the consultation.

Residents were asked to raise the biggest issues affecting them and how they think the council should allocate its budget across essential services and infrastructure.

However, significant impacts from high inflation, rising interest rates and the cost-of-living situation have created a highly uncertain financial outlook for local authorities across the UK.

Councillor Whitbread added: “With the invaluable input of Essex residents and businesses, we are now working towards our budget proposals and can invest where it matters most.

“We don’t have all the answers when it comes to addressing the challenges we face locally and nationally. Like many households across Essex, we must also make difficult choices about where we spend our budget and where to make savings.

“We look forward to sharing more about this important budget with residents over the coming months.”

In the lead up to the Autumn Statement, the County Councils Network (CCN), of which Essex County Council is a member, warned they are in ‘significantly worse’ financial position than before the Government’s Autumn Statement, as a new survey reveals that local authorities now plan more severe cuts and seven in ten now no longer confident they can balance their budget next year.

The authorities they represent were set to overspend by almost £650m this year due to spiralling costs, particularly in children’s social care and home-to-school transport, which was contributing to a £4bn funding deficit for those authorities over the next three years.

However, with no new core funding announced for councils coupled with an increase in the National Living Wage – which is set to cost those local authorities around £230m next year – nine in 10 councils in a snap CCN survey said that they were now in a ‘significantly worse’ position. This is because this extra cost burden is on top of significant savings targets councils already had.

In a joint letter outlining their concerns, over 30 council leaders, including the leader of Essex County Council Councillor Kevin Bentley, have written to Levelling up Secretary Michael Gove, warning that failure to rectify the situation and provide additional funding for children’s services would mean councils are likely to face the prospect of outlining painful reductions to frontline services.

Councillor Barry Lewis, Finance Spokesperson for the County Councils Network, said: “We understand that public finances are tight but the Autumn Statement provided no further funding to help ease the existing financial pressures for councils – pressures which are largely outside of our control. In fact, those have been added to with the increase in the National Living Wage, adding hundreds of millions to our budgets.

“The results of our new survey show that our councils’ financial position is significantly worse than before the Autumn Statement. The majority of the County Councils Network’s member councils will now have no choice but to increase their planned level of service reductions, reduce investment on growth-creating capital projects, and levy higher council tax rises: all of which impact our residents. For some, even this drastic action will not be enough, with seven in ten now no longer confident they can balance their budget next year.

“When finalising the Local Government Finance Settlement later this month, the government must address those pressures with additional funding focused on children’s social care and school transport services.”

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8 Comments for Essex County Council warn of difficult budget choices ahead:

Mark Ingall
2023-12-14 08:30:13

Same old Tories, cuts, cuts and more cuts on the way. But who will they blame this time. The Conservative government who wrecked the economy while giving away billions to their chums? The Conservative County Council who are responsible for balancing their books, but who have consistently backed the government as support for Councils have been slashed? Or perhaps they'll blame district Councils like Conservative controlled Harlow? Its clear the UK is in the middle of a terrible crisis and it's even clearer who is responsible.

Jerry
2023-12-14 09:02:45

A few things ECC don't tell you are most of the bosses earn more than the Prime Minister, they also enjoy subsidised luxury cars and extremely costly private heath insurance, gold plated pensions and the knowledge that its almost impossible to be sacked however incompetent you are. Unlike business they don't have to make a profit with the billions they receive from the taxpayer. All they are good for is spending our money.I forgot to mention a jolly up to the USA for no particular reason.

Adam
2023-12-14 13:18:36

Start here Chief Executive Salary: £198,875 Children and Families, and Education £169,104 Wellbeing, Public Health and Communities £147,784 Climate, Environment and Customer Services £169,104 Adult Social Care £169,104 Finance and Technology £169,104 People and Transformation £169,104 Economy, Investment and Public Health £169,104 Plus pensions and other expenses, Salary of the PM is £164,951 The public sector, is basically a parasite killing the host

Gary
2023-12-14 15:18:12

Maybe a way of saving money might be to look at percentage of the council tax that has to go to pay the council pensions ,l believe this has been calculated to be around 33% of our council tax it’s a scandal that I am paying for someone’s pension but cannot afford to put any money into a pension of my own

Eddie
2023-12-14 18:48:16

I feel what everyone seems to forget , we had lockdown due to covid , and no one was complaining when they were getting £2500 a month for staying home. Surely you must have known payback time would come. Which is probably the cause of most cut backs. Please you all seem bright people what would you do.

Eddie
2023-12-14 18:51:23

Gary. I worked for the council and I paid in a percentage of my salary over many years for my pension, we don't get it for nothing

Adam
2023-12-14 19:25:08

Eddie, lockdown was insane and funded by printing money 400Billion, to be exact which is why inflation is rampant. As for the paying into your pension yes you make contributions but the entire issue with pensions is the contributions do not cover what is being taken out. It requires either a ever growing tax base for public sector or ever increasing stock market for private sector. Of course infinite growth in a finite world is not possible so we are going to hit trouble the question is when and everyone hopes it is after they have milked it. The real issue is or financial system is unsustainable

L Thompson
2024-01-12 19:19:12

Ask Simon Harlow for a sub from the £500,000 that ECC gave him for a few lacklustre Facebook groups: https://x.com/bbclookeast/status/1745467546495586596?s=46&t=lVt-WH-GcsPlMCKrCR4ukg

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