Two reports are set to go before Bath & North East Somerset Council’s cabinet later this week, revealing the financial challenges the local authority is facing.
Rising inflation, increased demand on services, and uncertainties over central government funding are creating huge pressures on the council’s budgets.
A monitoring report on the council’s finances from April to September this year has described rising demand for and increasing costs of care packages for children and young people and increased costs for home-to-school transport.
Pay awards, rising fuel costs and reductions in income have also impacted council finances, but these have been partially offset by lower borrowing costs and extra Heritage Services income, resulting from strong summer visitor numbers.
Income from off-street parking is also helping the council’s finances, having broadly returned to pre-pandemic averages.
However, the report shows an overall projected overspend of £4.5 million against the revised 2022/23 budget of £126.12 million.
Alongside the monitoring report, councillors will also consider the Medium-Term Financial Strategy (MTFS), which provides the longer-term framework for the council’s budget setting.
The report highlights that the council’s in year 2022/23 budget requires £11.87m in savings and income generation, with £36m (including £2.32m already identified) needed to be found over the next five years, of which £19.43m is required in 2023/24.
This is based on the assumption that Council Tax increases of 2.99% remain for the period to 2024/25, with Council Tax reverting to 1.99% from 2025/26.
Councillor Richard Samuel, cabinet member for Resources, said: “Despite our prudent financial management we are facing unprecedented pressures and the prospects are far from encouraging.
“A continued lack of clarity around future funding for local government, high inflation and significant demand on our children’s services have created a very challenging financial position for us.
“The Local Government Association estimate that spiralling costs have added at least £2.4bn across local government to the budgets councils set earlier this year.
“We want to be upfront with residents about the scale of the pressure facing us, which we know come at a time as people are themselves increasingly struggling with their own household budgets.
“We know that rising energy costs and inflation are having a real impact on people’s lives.
“We will need to prioritise our spending and ensure we do everything we can to help local people, as well as boosting the local economy to sustain and attract good quality jobs.
“The continued strength and attractiveness of our city centre is reflected in the number of visitors we are seeing to our Roman Baths, which boosts income into the council.”
You can watch the meeting of the council’s cabinet on Thursday 10th November via YouTube.