South Gloucestershire Council faces £16.3million blackhole

Consultants are being hired by South Gloucestershire Council to help plug a looming £16.3million blackhole.

A report outlining the authority’s budget, which includes measures to help residents and young people struggling with the impact of the pandemic and improve schools’ standards and infrastructure, warns the forecast deficit by 2024/25 “requires addressing immediately”.

The Conservative administration has hailed the proposals, set to be approved by cabinet this afternoon (Monday, February 1) ahead of full council next week, for delivering a two-year balanced budget.

But the cabinet papers reveal this is being achieved with the use of reserves – which the organisation’s auditors say is “unsustainable” – and the maximum allowed council tax rise of 4.99 per cent from April, including three per cent allocated for adult social care.

And there will be a £16.3million base budget funding gap by 2024/25 which means “it will be necessary to think more radically about how the council’s finite resources are allocated”, according to the report.

During a two-hour grilling by the authority’s scrutiny commission on Wednesday evening (January 27) council leader Cllr Toby Savage said that if council tax was frozen this year, the financial deficit would instead become £42million.

He said: “Even reducing the council tax rise by one per cent would still mean approaching £2million of extra savings that we would need to make.

“It is a difficult one, people don’t welcome it.

“It is a position we are in that in order to balance our budget and to keep the council on a sustainable financial footing and deal with the largest driver of costs which is around adult social care, it is necessary to use that adult social care precept that makes up the majority of the proposed rise.”

The budget report said the council “must shift to a budgeting process that seeks to match Council Plan priorities to available resources”.

It said: “The outcome of this work will see council services prioritised in relative terms with options presented to the administration to stop and do less of services which make less of a contribution to delivering the Council Plan outcomes.

“This will be challenging given the significant levels of efficiency savings delivered by the council to date and as such a new approach is required.

south gloucestershire council faces 16 3million blackhole - South Gloucestershire Council faces £16.3million blackhole
South Gloucestershire Council offices in Yate
(Image: Jon Kent)

“It is intended to engage an experienced supplier who can work with the council providing costed options for changes to services (efficiencies, reductions and enhancements) in excess of the base budget funding gap to allow for investment in Council Plan priorities.”

But Labour Cllr Kim Scudamore told scrutiny commission members he was “cynical” about using consultants.

He said: “While a fresh pair of eyes can be of value, my experience has been you pay a lot of money and they come up with conclusions you could have got from staff if only you had listened.”

Tory Cllr Savage replied: “Having an external support is something we have done as part of previous savings programmes.

“We are an authority that is able to maintain free parking in our car parks, all of our toilets are open and we have replaced some of them with newer ones, we have more libraries than ever and their opening hours have doubled.

“So in terms of the advice we have taken over the last 10 years as we have had to save money to help repair the country’s finances, that has been money very well spent and has helped us to make decisions that are in the best interests of our residents in ways that reduce our inefficiencies but as far as possible protect services.”

Head of financial services Nina Philippidis said: “We have undertaken a tender and have asked suppliers to come back with their proposal as to how this could work.

“We want to learn from the experience of other public sector bodies and really challenge ourselves.

“We have saved a lot of money so far and delivered a lot of efficiencies.

“We now need to assess our services in relative terms because they are all important but we need to find a way to prioritise them.

“Officers need to be fully engaged, it has got to be owned, but we need that external knowledge coming into the authority to help us do that.

“We will be working with a supplier, not selected yet, to help us build a new budget-setting process.”

What the auditors said

A report by the authority’s auditors Grant Thornton to audit and accounts committee members on Tuesday, January 26, said: “The council’s medium-term financial plan relies on the use of reserves to deliver a balanced position in 2020/21 and 2021/22 but this strategy is not sustainable in the medium to long term.”

It said the organisation needed to give “urgent consideration” to how it could reduce its reliance on reserves, including a “clear savings programme”.

At the scrutiny meeting the following night, Labour Cllr Adam Monk said: “So what actions are you going to take to ensure a sustainable financial position in the long term, bearing in mind there is a £16.3million deficit just a short step away and that services are cut to the bone already?

“There are no more reductions to services available, and I don’t believe you will be able to retain services with efficiency savings of £16.3milllion.”

Cllr Savage replied: “The action we are taking to address the auditors’ comments is set out throughout the (budget) report.

“I would dispute your claim there is no room for further efficiencies.

“It is not the case that every single pound this council spends is being spent efficiently, so it is important we have a process where we can review that and make sure we are delivering the best possible value for money for taxpayers.”

He said the auditors’ assessment was based on the council’s draft budget, not the updated position.

Ms Philippidis said: “It is really important that we assess the risks this council carries and make sure we have adequate reserves to cover those risks.

“We are in a position where we have healthy reserves and we are covering the main risks the council has identified we need to deal with over the next four years.”

The budget includes a £1million council tax support package for those who have missed out on previous help, £102,000 of “surge” funding to expand welfare debt advice over the coming year, more support for domestic violence victims and a £1.3million pay boost targeted at the lowest paid council staff.

It also devotes £1.2million to launch phase two of the council’s trailblazing Recovery Curriculum, which prepared schools, staff and pupils to return to class after the first lockdown.

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A further £468,000 will be used to create a youth employment hub to address the increased number of young people not in education or employment.

Capital investment in schools includes new low-carbon primary school buildings in Winterbourne, Frenchay and Lyde Green, alongside maintenance and upgrades of existing schools across the district.

Millions more will be spent resurfacing roads and filling potholes, while £50,000 is earmarked for a programme of activity to mark the Queen’s Platinum Jubilee in 2022.

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