Peterborough City Council’s controversial budget plans approved by Cabinet

The Cabinet has approved a series of recommendations proposed by the joint members of the scrutiny committees.

This means that Phase One of the 2021/22 through to 2023/24 medium term financial strategy can now move to final approval at Full Council next Wednesday, (December 8).

Speaking to members at their meeting (29 November) at Sand Martin House, Cllr Andy Coles, Cabinet Member for Finance, said: “We have received a number of proposed recommendations from the joint members of the scrutiny committees regarding the budget and how that money should be spent and/or saved.

“The Cabinet recommends that we approve these proposals as well as the revised Capital programme and the forecast Budget Position that the council will break-even in 2021/22.

“At the beginning of this financial year Peterborough City Council was expecting to have to borrow in the region of £13.7m from central government in order to balance our budget.

“Later in the year, that figure rose to a deficit of £17.8m rising to £26.9m in 2022/23 and £28.9m from 2023/24.

“However, with our revised Capital programme, savings made from underspending across the council’s services and the use of £8m of COVID reserves which we find we no longer need, we are in a position to state that the council will break-even in 2021/22, and that we now have a zero-requirement from central government.

“Further down the line there will be some challenging decisions that will need to be taken with regard to the council’s services but, coupled with savings made from the sale of assets that no longer deliver economic value or, are surplus to requirements, as well as a forensic review of our £200m holding of contracts with key partners, we believe that this council is on track to achieve its aim of balancing the budget in the financial year 2023/24.”

Peter Carpenter, Director of Resources, added: “The reason we find that we don’t now need the £8m of COVID budget is because I put an additional £10m into future spending for children’s service and adult health care to cover future years.

“So, we are using a reserve that we’d originally been expecting to use for COVID to mitigate that Capital Direction we’d expected to borrow from the government; and, importantly, some of the most significant overspends in this years’ budget have been down to COVID and we are still getting government funds to cover those initiatives.

“It will be possible to get the balanced budget this council must achieve, but it will not be easy – there will inevitably be some cuts to services which are unpleasant, and which none of like to make; but I firmly believe that people understand the financial pressure this authority is under, and that we are doing everything we can to try an bring what services we can to the people of Peterborough.

“Nobody could have imagined the strain on resources that COVID has brought about coupled with the near 40% reduction in funding that we no longer get from central government, while all the time our population increases, but our council tax base remains lower than many similar councils around the country.

“What we have done is to bring in a cross-party member working group – a Financial Sustainability Working Group – whose task will be to recommend to Cabinet and on to Full Council extra savings in the region of £10m in the first phase of the budget.
“In addition, we’ve increased our staff resources for developing the next part of the budget – Phase Two – which will concentrate on Capital savings where possible, and we are preparing for the establishment of an Independent Improvement and Assurance Panel who will commissioned with immediate effect to report back to Cabinet and then Full Council on how we are achieving our savings goals and their effectiveness.

“Central Government have told us that the council must review is key performance strategy and that only through asset sales will we be allowed to make such budgetary alterations in the future.”

The members of the Cabinet unanimously voted to approve all the recommendations and proposals before them, and so Phase One of the medium term financial strategy 2021/22 through 2023/24 can now go before the next Full Council on Wednesday, 8 December 2021, for final approval.