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Essex County Council’s (ECC) decision not to increase council tax will lead to pressures and cuts in the future. it has heard.
Although it will raise the adult social care element by 1.5 per cent, the budget also has a funding gap which opposition parties say have yet to be addressed.
Savings need to be found to close the £46 million gap in finances – some in the next two years. But where the cuts are coming from are yet to be identified.
The annual cost of the council’s borrowing is also set to increase by £37 million between now and 2025 – with a budget gap forecast to climb to more than £90 million.
Total borrowing is set to increase from just over £1 billion to £1.45 billion by 2024/25 as ECC looks to deliver a range of capital schemes. These include Chelmsford’s proposed new Beaulieu Park train station, the North East Bypass and the Colchester/Tendring A120/A133 link road, as well as highways maintenance and providing new school places.
The increasingly tight finances of ECC has meant that identifying and delivering savings is more important than ever. The budget assumes £46 million of savings to balance the 2021/22 budget.
But ECC says the ongoing pandemic may result in non-delivery of savings in 2021/22 with a knock on impact in 2022/23.
At this stage, £28.7 million worth have a high level of confidence, £13 million -worth medium risk and £4 million have a high level of delivery risk.
The Lib Dems had proposed a one per cent increase in council tax to raise an additional £7 million to help pay for mental health services in children, and supporting low income families.
Cllr Stephen Robinson said: “This includes £46 million of cuts which are not identified and even the budget report admits that a third of those are one off and therefore something else will have to be found in the next year.
“The budget report also makes clear that debt charges for serving the capital programme are arising from seven percent to 11 per cent of revenue in a couple of years. This is becoming unsustainable and will drag on the revenue programme.
“Finally, the county council conservative group has ignored their own public consultation where people said they would be willing to pay a small rise in council tax in order to protect vital services and so that is where the Lib Dem amendment comes from.
“The Lib Dem amendment talks about real action on climate change which is the greatest threat to our current way of life.
“The Conservatives are irresponsible in lining up cuts but they won’t tell us where they are coming from.”
In total, ECC will be investing an additional £33 million across its portfolios over the next year, with the majority of this being invested in adult social care services to support some of the county’s most vulnerable individuals and those that care for them.
ECC’s capital programme, which was announced in the papers for its January Cabinet meeting, also includes a £1.34 billion spend over the next four years on major infrastructure projects such as new schools and major road improvements. The spend in 2021 is set to be £290 million – 50 per cent more than the last two years’ capital budget.
Councillor David Finch, leader of ECC, said: “While this year’s budget has been produced under the most testing circumstances the council and our communities have ever faced, I want people to take away a message of hope today.
“We are committed to building on the work we have done to date – not just through the pandemic but over the past decade since the last recession – to help Essex to emerge healthier and with a brighter future.
“I am extremely proud that we have been able to set out robust plans today for how we will do this, while at the same time achieving a 0 per cent county council tax increase for residents and just a 1.5 per cent increase from the Government’s adult social care precept.
“As an organisation, we have taken great strides over the last ten years, investing in Essex to benefit the communities and businesses that call the county home.
“We have a strong record of sound financial management and I am confident we will recover . We have done it before, and we will do it again.”