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Council faces stern challenge to retain control of budget, Cabinet members told

Members of the cabinet at Peterborough City Council have been told that they face stern challenges if they are to retain control of the budget in the coming months. 
Peterborough Town Hall
Cabinet members told Peterborough City Council faces a stern challenge to retain control of its budget

Speaking at their meeting yesterday (October 25), Peter Carpenter, corporate director of resources, said: “I believe that this council has and is doing everything that would be expected of it by central government at this time. 

“But we cannot ignore the fact that we have some very stern challenges ahead in the coming months if we are to retain control of the budget. 

“It is therefore vital that we get this current strategy correct so that we retain our own destiny and keep control of the budget here at Peterborough City Council.” 

The stark warning came as members reviewed the first draft of is Medium-Term Financial Strategy (MTFS) 2022/23 through 2024/25. 

Should that strategy fail, and the multi-million-pound financial deficit not be cut, thereby setting a balanced budget, then there is the very real possibility of central government stepping in and taking over control of the budget. 

“Nobody wants to see that happen”, said Mr Carpenter. “But we are aware that this has happened and that councils up and down the country are in a very similar position our own with multi-million-pound deficits to somehow cut in order to balance their budgets. 

“Today’s meeting outlines some of the drastic but necessary measures that we believe need to be taken in order to not only balance the budget for the period concerned, but vitally retain control of that budget in-house at the council.” 

In order to do this, members of the Budget Cabinet were asked to approve a series of proposals and update assumptions to set a balanced budget for the financial years 2022/23 through to 2024/25. 

Cllr Andy Coles, cabinet member for finance, identified four areas over the coming months where cuts could be made, saying: “This first phase of our recommendations includes asset sales, capital programme reduction, a forensic examination of all service expenditure and contract reviews. 

“Effectively our original capitalisation direction that we were assuming of £13.7m is to be reduced by £10.5m, which is very good news for us. 

“However, we still have very involved financial controls in place to ensure that we don’t spend too much, and every financial decision made by the council is to be scrutinised by Mr Carpenter. 

“Despite significant increases due to the growth of the population of Peterborough, and some increases in council tax and business rates, the core funding of the council – council taxes – has reduced in real terms since 2013/14. 

“The MTFS 2021/22 to 2023/34 has outlined budget gaps of £26.8m in 2022/23, rising to £28.9m from 2023/24 onwards. 

“With the scale of the financial challenge in future years remaining, the council must make further savings and service reductions to balance the budget in future years. 

“This report outlines the phase one MTFS plans to reduce the budget gap by £9m, £6.5m of savings proposals and £3.2m of funding changes with £0.7m of newly identified budget pressures. 

“This leaves a remaining gap of £17.8m in 2022/23, rising to £21.1m by 2023/24.” 

Members agreed unanimously to approve the recommendations of the report. 

In summary, Mr Carpenter said: “The release of the MTFS phase one 2022/23-2024/25 report outlines the budget proposals and the strategic approach to addressing the financial gap and the financial challenges facing the council. 

“The Budget Cabinet will need to seek the opinions of all residents, partner organisations, businesses and other interested parties to understand which council services matter most; but Peterborough City Council must set a balanced budget for 2022/23 within the financial resources it will have next year, and the feedback received will help inform Cabinet in considering budget proposals.” 

Leader of the council Wayne Fitzgerald said: “The Budget Cabinet will review the consultation feedback on the proposals and the MTFS at the meeting of the next meeting on November 29, 2021, before making a final recommendation to full council on December 8, 2021.” 

Earlier this month the council announced Peterborough was in line for cuts to its street-cleaning services and could face a significant council tax rise in years ahead as the authority looks to make up a near £18m budget gap. 

The council has been squeezed by rising social care costs and a loss of about £45m in its revenue support grant, from £55m to £10m.

These two factors unsurprisingly all feed into the local authority’s draft budget for the next financial year which proposes a raft of cuts to street-cleaning services, as well as revealing the imminent sale of St George's hydrotherapy pool.

A council tax decision will be made next year following consultation, but council leader Wayne Fitzgerald has warned that the city will need to increase taxes to bring them more in line with the average.

In June it was revealed external auditors had remained “seriously concerned” over the authority's financial position, even after the government had agreed to provide capitalisation direction loans worth £24.8m in February.