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Savings, investment and outline budget to address major funding challenges

3 minute read
Savings, investment and outline budget to address major funding challenges

Published at 5:32pm 17th December 2018.

Cllr Nigel Manning, Lead Councillor for Finance and Asset Management, explains: "Despite a successful mixture of focused savings, wise investment and effective management, which helped us remove the predicted budget gap in 2019-20, the Council still faces significant funding challenges. Particularly as we didn't get any general grant funding this year and since 2013 the Council has received nearly £4 million less in overall central government funding support.

"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 funding situation is set to get harder. We predict a budget gap shortfall for the Council of about £8 million in the next four years."

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 the 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 latest best estimate is that the cumulative deficit will be about £8 million in 2022-23.

Cllr Manning adds: "To address the budget gap, we continue to 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 are also lobbying the government to try and improve funding on an individual basis, as well as through channels such as the Local Government Association.

"We aim to maintain the second lowest share of Council Tax in Surrey when the Council considers the final 2019-20 budget at its meeting next February. 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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