A south west unitary is warning residents it faces an “extreme” challenge to maintain services after more than doubling the amount of savings it needs to make before 2020.
Bath & North East Somerset Council has blamed rising demand for adults and children’s services for its worsened predicament. In a press release ahead of a cabinet meeting on Wednesday (11 October) the council said it needed to find an additional £16.2m of savings by the end of 2019-2020, on top of the £14.8m already planned over the next two years as part of a four-year £49m savings programme.
Charles Gerrish (Con), cabinet member for finance & efficiency, predicted the proportion of the council’s budget spent on social care services would increase from 75% to at least 80% by the end of this financial year.
He said: “Our community expects us to prioritise support for vulnerable people; this means all our other services will have to be funded from what’s left. This will be extremely challenging, but we still aim to deliver high quality services into the future.”
The council is forecasting an overspend of £5m on its £115m 2017-18 net budget and has implemented a series of spending controls in an attempt to reduce it. These include a review of all vacancies, holding vacancies vacant for at least three months, reviewing all contract spend over £10k and offering staff the option to buy additional leave.
A report to cabinet said the £49m savings planned between 2016 and 2020 were “well underway” and included £7m in additional income generated by the council.
However, since the four year settlement for councils was announced by government in 2016 the amount of new homes bonus cash the council was expecting to receive has been reduced by almost £700,000 in the next two years and almost £2m over five years.
The report said the council needed to find £34m savings over the next five years, on top of the £49m, equivalent to a reduction in net spending in order to stay in balance. However, while the council is planning to levy the social care precept in the next two years the budget does not currently include any increase in the regular portion of council tax. The report said increasing council tax by 2% a year for the next five years would reduce the overall gap by £8m.
Along with the other members of the West of England CA, Bath & North East Somerset is part of a 100% business rates retention pilot. The estimated £2.5m annual benefit of this, in part due to the abolition of the levy on growth, has already been factored into the budget. The cabinet report warns if the council returns to a system of 50% retention in 2020-21 when the pilot expires this would increase the funding gap by £3.9m.