Chelmsford will need to find additional income or cuts in costs to fill a budget gap of £1.7m according to projections for next year’s finances.
The mid-case forecast will see a cumulative deficit worsen to almost £2m the year after and to £2.437 by 25/26 that needs to be addressed.
However, the forecasted figures have come with a major health warning – and are likely to not be the same as the final figures that will be used for budget setting in February 2022.
The forecasts assume a £5 council tax increase in each year.
Additional COVID-related Government support is not expected to be repeated but from 2022-23, new arrangements for funding local government are expected to be introduced.
This should be announced in late-2021, but this timing could slip which has led to frustration with local government over lack of certainty over financing.
Driving the central case forecasting is that a number of council income streams are not expected to recover to their pre-COVID levels – retail market down £0.06m, rental income (High Chelmer) down by £0.6m per year and car parking down by £1.4m per year.
Cabinet member for finance Chris Davidson said: “These are just scenarios.
“They will not turn about to be accurate because there is so much uncertainty around especially concerning COVID-19 and how the pandemic is going to roll out over the summer and also government funding for councils.
“They are though the best projections we have they set the context as we prepare the 22/23 budget which I will present to council next February.
“The reality though is that without significant additional funding form Government we will need to find additional income or cuts in costs.”
He added: “The central for shows a deficit of £1.7m and we need to fill this in order to balance the budget and continue to practice sound finance.
“I am happy to receive suggestions of option we should consider in filling this gap.
“We will be working through all the option with officers and I will be happy to discuss any ideas members wish to bring to me.”
Leader of the city council, Stephen Robinson added: “Because we are doing the right thing we have suffered.
“Because we have tried to be self-sufficient and not rely on government and generate income they have failed on their promise when they said they would meet those shortfalls.
“We have somehow got to square the circle.”