Budget gap for council in Peterborough predicted to rise to over £10 million in 2026

Peterborough City Council’s budget gap is predicted to rise to £10.6 million in the 2026/27 financial year.

That is the current conclusion of the council’s Medium Term Financial Strategy.

The figure is expected to be £5.1 million in 2024/25 despite the council passing a balanced budget for 2022/23 with a £0.6 million underspend. There has not been a forecast for 2023/24 yet.

The reason for the rise has been put down to “higher than anticipated” inflation and growth pressures.

The figure are all contained in the latest report from the council’s Independent Improvement and Assurance Panel, which will be presented to full council on Wednesday (July 26).

The panel was set up in December 2021 by the Department of Levelling Up, Housing and Communities to conduct six-monthly reviews of the council’s performances. This is the third such reviews.

On the first theme the panel is evaluating, ‘Financial Sustainability’, the report noted: “The council has continued to make improvements in both the way that it manages budgets and in how it makes financial decisions.

"The Panel has noted these improvements and would wish to see the changes fully embedded in the management of finances at all levels of the organisation.”

It does note, however, that the council’s £0.6m underspend in 2022/23 was achieved by utilising some of its £7.5 million reserves and that “there are a number of areas where there were significant service overspends that will need to be brought into alignment with the budget in the current year to ensure that budgetary control is maintained.”

The capital budget showed a £60.1 million underspend after a technical adjustment of £103.2m.

The area with the biggest area of underspend was Place and Economy, according to the report.

Training has now been given to capital budget holders, which had not been received for “some significant time.”

It has also been confirmed that the council has £75 million of short term debt due to be refinanced in the next 12 months.

The report will be discussed on the full council meeting on Wednesday (July 26, 6pm).