As the crisis in local government funding continues to impact on councils across the country, Nottingham City Council has highlighted it faces a £50 million gap in its budget next year, 2024/25, which will have a major impact on its services.
A report to the council’s Executive Board on 19 December sets out a range of initial proposals put forward by council officers to make the savings needed to close the budget gap and balance the budget for 2024/25, which is a legal requirement for all councils.
Last month, the council’s chief finance officer issued a Section 114 Report due to the authority not being able to deliver a balanced budget for the current year.
Major pressures affecting local government nationally, including the cost of increased demand for children’s and adults’ social care and rising homelessness presentations, have led to a £23 million overspend this year and whilst the council is working to reduce this through enhanced spending controls, some of these underlying pressures will continue to affect the budget next year.
Last year, services for adults, children and housing and homelessness accounted for 62.5% of the council’s revenue budget.
Since 2013/14, the council’s Revenue Support Grant (RSG) from Government has reduced by £97 million every year.
Over the same period, Nottingham’s ‘Core Spending Power’, a measure used by Government which also includes income from Council Tax, business rates and other grants, has reduced by 28.2% in real terms compared to 19.4% for all councils in England, according to SIGOMA, the Special Interest Group of Municipal Authorities.
Although not the cause of the overspend in the current year, past issues in the council’s financial governance which led to the appointment of an Improvement and Assurance Board have reduced its financial resilience and ability to draw on reserves.
In order to bridge the large budget gap faced, officers have put forward proposals for consideration by councillors which is now subject to public consultation.
The proposals for consultation involve managing demand, increasing charges, reducing costs, reducing services to a statutory minimum and in some cases ceasing services and funding altogether.
They include:
- Review Library Service provision whilst maintaining a comprehensive and efficient service offer appropriate to the needs of citizens
- Removing the council contribution towards Area Based Grants to the voluntary and charity sector and grants to arts organisations and cultural sector
- Deletion of both the Community Protection and Resident Development service areas with approximately 20 FTE posts moved to Regulatory Services to delivery statutory duties relating to environmental enforcement and antisocial behaviour
- Reviewing the operation of community centres and seek to remove council subsidised grants
- Reduce public transport infrastructure to minimum statutory provision including the removal of funding to operate two bus-based park and ride sites, Victoria Bus Station and the real time passenger information system
- Reduce all linkbus services to statutory minimum provision, remove Easylink and withdraw funding contribution to the Medilink service
- Moving to the minimum statutory provision of Concessionary Fares for which would remove the concession from the tram and companion pass holders and funding for managing the Robin Hood Scheme
- Re-structure and reduce tiers and overall capacity in Adult Social Care Assessment function
- Closure of Colwick Park Activity Centre
- Ending school uniform support for eligible families if the Household Support Fund grant does not continue
- A reduction in council staffing levels of over 500 full-time equivalent posts. Every effort will be made to limit compulsory redundancies through targeted voluntary redundancy
- A proposed Council Tax increase of 4.99% which includes the 2% Adult Social Care precept permitted by the Government
Cllr David Mellen, the Leader of Nottingham City Council, said: “Every day now, headlines tell of the crisis in local government funding and the impact this is having on councils across the country.
“In Nottingham, a Section 114 had had to be issued for the current year as the cost of providing care for adults and children and people presenting as homeless has meant we simply can’t balance our budget this year.
“This needs to be seen in the context of our main grant from Government being cut by nearly £100m each and every year since 2013 and the failure to properly address the issues facing both the adults and children’s care system nationally with rising demand and costs overwhelming council budgets.
“As things stand, unfortunately the budget pressures we are seeing are unlikely to reduce next year and like many councils, we are facing a serious gap in our budget for 2024/25.
“This means officers have had to put forward proposals for significant savings and service reductions which no-one would want to make but have to be considered by councillors if the council is to meet its legal requirement to set a balanced budget.
“The proposals include some valued services and funding that we have been able to continue to provide in Nottingham but have already been stopped by many other councils. Some of the proposals reluctantly have support from the Majority Group on the council, whereas others do not have that support at this stage. We are seeking views of the public on all proposals put forward.
“All of our services are important to us as councillors. Like many other councils, we are the faced with some extremely tough decisions over the coming months with our budget gap next year being the worst in living memory. But we are all in this position due to the continued underfunding of local government over many years and the huge increases we are seeing in demand for services as a result of the national cost of living and housing crises.
“We want to be open and transparent about the scale of the challenge the council faces and the difficult decisions that need to be made and give people the chance to have their say.
“After the initial proposals being put forward by officers have been considered by councillors at the meeting on 19 December, a public consultation will take place before any final decisions are made when the budget for 2024/25 is set in February.”
