A firm grip on finances in the face of spiralling costs, is why Leicestershire County Council hasn’t hit crisis point, says the authority as it publishes a new budget plan.
The four-year proposals reveal rapidly rising demand for services, and inflation, are increasing costs by £217m, compared to expected extra income and savings of £122m.
A combination of innovative initiatives and a reduced back office – which are both driving down costs by £33m - plus a Council Tax rise, means the books will balance next year but relentless pressure on services could create a £95m budget gap by 2029.
The plan includes earmarking just under £100m more to support vulnerable children and adults. An extra £12m of capital is also proposed to help fix potholes and repair roads, taking the total spend on roads, major schemes and tackling flooding to £125m over four years.
A proposed 4.99 per cent Council Tax increase from April (including 2 per cent for adult social care) will increase bills by £1.54 a week for a band D house. Generating £20m, it only covers the National Living Wage and National Insurance rises.
Our financial position remains extremely challenging, although the strong grip we’ve maintained over our finances has ensured we are not at crisis point.
I’m proud that pioneering work to drive down costs is paying off but the stark reality is that surging demand is not receding.
This squeezes what we can spend elsewhere but we’re still fixing 7,300 potholes a year, supporting over 1,000 households to stay warm, gritting 1,300 miles of road each night during winter, and much more.
That’s why it’s vital an overhaul of local government funding tackles the big issues. A focus purely on deprivation will disadvantage rural counties.
Person:Acting council leader, Deborah Taylor
Key budget pressures include:
- Children’s social care – a 60 per cent rise in demand and a 33 per cent increase in prices for placements have pushed up costs by £15m over the last two years
- Special educational needs and disability support - with 90 per cent more children having education, health and care plans compared to five years ago
- Construction price rises – costs for infrastructure schemes have been driven up significantly with inflation
Despite being the lowest funded county, we’re high performing. And have saved £276m since 2010, showing how efficient and lean we are.
We heavily rely on Council Tax to fund vital services. I know wallets are stretched but without an increase, we couldn’t deliver the level of service we know our residents need.
Twenty-million-pounds sounds a lot but is wiped out by the National Living Wage and National Insurance rises. The ‘new’ money the Government announced for councils doesn’t shift the dial – and won’t cover all the extra costs from the autumn budget.
The funding system must change to benefit low funded councils. If we were funded at same level as neighbours Nottinghamshire and Derbyshire, we’d have around £100m more each year, and this can’t be right.
Person:Lee Breckon, cabinet lead for resources
Pioneering projects helping the council to make ends meet include:
- Streetlight switch - upgrading 68,000 streetlights from sodium lamps to LEDs is cutting carbon emissions by a massive 85 per cent compared to 2008 and driving down costs by over £2m a year. The project has just scooped prestigious Highway Electrical Association award for Sustainable Project of the Year.
- Helping people live at home - rolling out ‘care tech’ - over 2,600 pieces of equipment, including falls detectors and GPS location trackers – is helping over 1,000 people to live independently at home for longer and reducing adult social care costs by £1.25m.
- Barnardo’s - teaming up with Barnardo’s to run eight children’s homes locally is on track to generate savings of £2.25m over four years.
Tune in online next Tuesday (17 December) to hear the council’s cabinet discuss the proposals.
A consultation on the plan is set to launch on 18 December.
Find out more
The council’s yearly budget totals £616m – the authority is one of the biggest organisations in Leicestershire, spending around £10m every week on crucial services for Leicestershire residents.
District councils, police, fire and parish and town councils all make up portions of residents’ total Council Tax bills.
The proposals at a glance:
- The books balance by using reserves to manage a small gap – with a budget gap of £42m in 2027, rising to £95m by 2029
- Just under £100m more to support vulnerable people – in response to huge increase in demand
- An extra £12m of capital to help fix potholes and repair roads - taking the total spend on roads, major schemes and tackling flooding to £125m
- A Council Tax rise of 4.99% from April – generating an extra £20m which covers only the National Living Wage and National Insurance increases
- £33m of savings – including redesigning services, reducing the cost of back-office support services by maximising digital technology and smarter procurement, plus £52m to bring spend on SEND more in line with Government funding
- A £380m four-year capital pot – to fund one-costs of building roads, social care accommodation, new school places needed to support new housing, and more.