First phase of Peterborough City Council’s budget plans approved as scale of financial challenge outlined

The current budget gap of £18m will be ‘really difficult to bridge’, but ‘the council must do so to retain control of its finances’.

That was the message put to Peterborough City Council’s Joint Meeting of the Scrutiny Committees (17 November), as members approved Phase One of the budget.

Peterborough City Council finds itself in a precarious position having to provide a balanced budget by 11 March 2022, or risk having control of the budget for the entire city being taken away from officers, and taken over by central governmentOn the agenda was the first part of the council’s Medium Term Financial Strategy 2022/23 to 2024/25, and Cllr Andy Coles, Cabinet Member for Finance introduced the item to the chamber, saying: “I am acutely aware that at the last Financial Sustainability Working Group meeting some members quite rightly asked questions about the two independent reports that were recently published, and how it is that the council finds itself in the situation that it is, as outlined in those reports.

“These questions must be answered in an open and transparent way and so, in the first instance, I propose to present my view in a meeting with the Financial Sustainability Working Group so that in the next few weeks will be able to properly discuss this.

“The questions from that meeting specific to the budget and an overall improvement plan will then be taken to the Extraordinary meeting of the Full Council, which members will see has been added to the calendar for 16 December.

“I do not believe that we can move forward and set out these future improvements without considering what we can learn from the past, and I am keen that we do this in an open and constructive way.

“Budget gaps have been outlined as £26.8m for the year 2022/23, rising to £28.9m from 2023/24 onwards.

“Phase One of the strategy aims to reduce the gap by £9.0m which consists of £6.5m of savings proposals and £3.2m of funding changes but also with £700k of budget pressures.“This leaves a remaining gap of £17.8m for us to find in 2022/23, which will rise to £21.1m by 2023/24 to move the council to financial sustainability by 2023/24 which is the requirement of the Department of Levelling Up, Housing and Communities.

“So, the Phase One budget proposals can be summarised as £0.724m of additional pressures including the additional costs of a single Chief Executive, and the addition Social Care Levy on National Insurance.

“There’s £3.2m of savings due to the extension of Business Rates pooling, £1.9m of savings has already been partially delivered in the 2021/22 monitoring reports, and £4.6m of savings proposals – which also includes £2.2m due to a reduced Capital programme.

“These proposals have been debated in two Financial Sustainability Working Group meetings and were published on 15 October 2021.

“The Phase One Capital programme is usually reviewed in more detail in Phase Two of the budget, but I want to point out that work is already underway to reduce spending in 2022/23 budget in which there is £79.0m before the inclusion of investor schemes.

“In Phase One, £70.0m of new Capital budgets are requested and these include Clare Lodge refurbishment, Westcombe Engineering machinery investment, contributions to the Highways Agency for the A14 improvements scheme and, the building of a Mausoleum at the Fletton and Eastfield cemeteries.

“In the Phase Two budget we will still be left with savings of just under £18m to be delivered to balance the 2022/23 budget.

“Processes have been put in place to find this sum and move the council to financial sustainability, and the core workstreams include Capital Reductions to minimise council funded-schemes to only those that are legally required.“All other council-funded schemes will be stopped.

“The government has made it clear that any budget deficits in 2022/23 will have to be funded through the sale of assets, as well as the costs of transformation of services.“The council currently manages over £200m worth of contracts, and these are being reviewed to see if we can reduce or retain effectiveness.“We have undertaken a forensic review of services delivered starting with Adults and Children’s, then working through Housing, Planning, Culture, Leisure and Communities.

“All of this work will then reveal new ways of delivering services to the people of Peterborough by the council, but at lower costs.

“Finally, we’re progressing £9m of other savings that have already been identified by our officer team through the Rapid Interventions Group.

“These improvements will be set out in six-monthly action plans so that we don’t try to ‘eat the elephant’ all in one go, but ‘one bite at a time’.

“We will then report to an improvements panel who will assess our progress and report back to the government.

“It is vital that the council remains in control of its own destiny by delivering a sustainable budget, and showing progress to the government.

“If this is not the case, intervention is likely to follow and through it, total loss of control of the spending of the council.

“The remaining gap of £18m is going to be really difficult to bridge and all council effort needs to be focussed on this, which means priorities may well need to change in the short and medium term to ensure that spending is only made on statutory, business-critical and legal requirements.

”An additional Extraordinary Meeting of the Full Council has been added to the calendar for 16 December 2021.