The average Essex household is set to have to pay an additional £1.39 each week for services provided by the county council to help bridge its budget gap.
Expenditure pressures on the budget for 2024/25 total £100 million. A 4.99% council tax increase would generate £40.3 million of additional income.
The planned extra money comes after what the council has described as a ‘disappointing’ finance settlement late last year. It means the total amount a band D household will have to pay for the Essex County Council part of the council bill is set to rise from £1,450.17 to £1,522.53.
However, the council has said the proposed council tax increase of 2.99 per cent, plus a two per cent increase on the adult social care precept will help provide more certainty in the medium term and offer greater stability in the face of a budget need that has grown by six per cent this year.
Councillor Chris Whitbread, finance portfolio holder at Essex County Council, said: “Putting up council is never an easy decision to take but bearing in mind where we are.
“We understand the Government’s position. We were disappointed by the funding settlement for this year because we have pressures of six per cent growth on what we are spending.
“But the most important thing is we must protect those frontline services for the most vulnerable.
“That tough decision to put the council tax up by 2.99 per cent and two per cent for the adult social care precept was vital for this year
“But what it does mean – because we have a very clear plan for the council’s finances – is that not only is it the right decision for this year, it’s the right decision for future years as well.”
The council is expecting tough future financial scenarios – after delivering 100 per cent of all existing planned savings, the budget gap is expected to be £22 million in 2025/26 rising to £51m by 2027/28, before further tax rises.
Cllr Whitbread said he had confidence in the council’s savings, income and efficiency programme which enables setting a balanced budget for 2024/25 with a further £37 million of savings planned through to 2027/2028.
In 2024, there will continue to be focus on additional savings and cost avoidance through the council’s whole council transformation programme which will include using technology and digitisation, and the redesign of services and different ways of working with partners with an ambition to identify a total of £100 million of savings. This year the council plans £32 million of savings and £20 million in 2025/26.
He said there are no planned redundancies but there are vacant posts that may be deleted.
He said: “We are all going through tough times. But we are still in good shape, we are still providing good quality services , we are still investing in people’s priorities , we still have a capital plan that has over a £1 billion investment in infrastructure.”
He added: “The cupboard is not bare because we have put in place the right plan for the future. If we did not take the steps we are taking now, then we would have more impact in future years.
“We have a plan that means we will continue to provide those services that people care about.
“We have a plan that means we will continue to deliver the infrastructure that the county needs and we have a plan to make Essex fit for the future that will allow us to avoid some of the pressures that other councils are feeling.”
Within the £100 million extra pressures being felt by the council £42 million is coming from social care inflation, including the impact of increases to the National Living Wage.
A total of £31 million of demographic pressure, most significantly impacting demand across children’s services at £18 million and Home to School Transport at £11 million.
Another £17 million is coming from pay inflation and £11 million is coming from the impact of adult social care packages becoming more costly due to changes in need
The council says it will continue delivering a range of schemes to maintain, enhance and deliver major new public assets, as part of its long-term capital spending programme.
These include the new station at Chelmsford’s Beaulieu Park, the Chelmsford North-Eastern Bypass and Colchester/Tendring A120-A133 link road and rapid transit scheme. They also include ongoing highways maintenance and new school buildings.
Cllr Whitbread added: “It’s no secret that local government is currently facing significant financial pressures and unfortunately Essex is not immune to them. We know these challenges are felt by many of our residents too.
“However, I am confident our latest budget proposals reflect the best possible balance of protecting and developing essential services while continuing to focus on priority areas which residents have helped us establish. We will also continue work to improve our county’s infrastructure. We have a robust plan for the coming year and the years ahead.
“It’s also important, now more than ever, to ensure we’re achieving the best possible value for money for taxpayers. This year’s proposed council tax increase will mean finding an extra £1.39 a week for a typical Band D property household.
“We know any increase will not be welcome news for many and this isn’t something we do lightly. However, given the current economic outlook and demand pressures, it is something we are unable to avoid. This increase will place us in a more stable position in the coming years and allow us to plan with greater certainty in the medium term.
“I am proud that we have again been able to balance the books in Essex for the coming year. But I want to be clear that without significant interventions and support from central government, more and more difficult decisions lie ahead for councils in the future.”
The 2024/25 budget proposals will be presented at the council’s cabinet meeting on January 16 and at its full council meeting on February 13.