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Future £8.5 million budget gap means more savings and local investment

3 minute read
Future £8.5 million budget gap means more savings and local investment

Published at 11:23am 24th July 2018.

Last night (17 July), the Executive approved the latest financial assumptions, so that we can prepare the outline budget for 2019-20 and make medium-term plans up to 2023.

Cllr Nigel Manning, Lead Councillor for Finance and Asset Management, explains: "Next year's budget and beyond will be very challenging, particularly as we got no general grant funding at all in 2018-19 and will have to pay money back to the government from 2019-2020.

"We provide a wide range of vital services that our communities rely on and invest locally to help our economy flourish, so although we start from a strong financial position, the situation is set to get harder. We predict a budget gap shortfall for the Council of about £8.5 million in the next four years."

For 2019-20, we face a negative grant, where the Council pays more money from retained business rates to the government. The amount of negative grant we will pay in 2019-20 is nearly £700,000. We estimate that this could total £5.7m between 2019 and 2023.

The local impact of proposed Local Government Finance changes from the national 'fair funding review' and 75% business rate retention from April 2020 are also not clear. From the little information available, we expect a significant shift of resources away from district and borough councils towards funding statutory social care services at county councils.

As we receive no grant, this will mean more of our business rates will be redistributed away from Guildford Borough Council. So under a system of 75% business rate retention it is likely that we will retain less than 4% of business rates collected in our borough.

Due to the uncertainty about our funding, we predict a revenue budget deficit of between £7.7 million and £11.5 million over the next four years. Our best current estimate is that the deficit will be about £8.5 million.

Cllr Manning adds: "To address the budget gap, we will build on the £10 million of savings we've made in the last five years and carry on with our extensive programme to transform our services. We also aim to maintain the second lowest share of Council Tax in Surrey and invest wisely to generate extra income and help regenerate our borough.

"On a wider scale, we are lobbying the government to try to improve the funding situation on an individual basis and through all available channels such as the Local Government Association. It's not going to be easy, and we face some difficult decisions, but we are determined to keep our residents at the centre of everything we do."

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