Peterborough council forecasts almost £2m deficit in council tax fund as budget setting begins

Peterborough City Council (PCC) is forecast to have an almost £2m deficit in its council tax collection fund at the end of the financial year.

A report presented to the council’s cabinet this week says that the fund’s overall deficit is estimated to be £2.4m by 31 March, shared between PCC (£1.9m), police (£338k), fire and rescue (£99k) and the Cambridgeshire and Peterborough Combined Authority (£15k).

This will have to be factored into the cabinet’s budget setting process, which has now begun and will continue throughout January, at a time when the council already faces significant financial challenges.

But this £1.9m figure is separate from the £6.2m shortfall forecast in the council’s general fund forecast next year, partly because it’s shared with other authorities and partly because the entire deficit doesn’t have to be made up in one year but can be spread over two.

It is a slight improvement, though, on PCC’s position this time last year when it was forecasting its council tax collection fund deficit at £2.1m – or part of a £2.6m deficit overall.

Budget setting process begins

PCC’s cabinet, which is now led by Cllr Mohammed Farooq (Peterborough First, Hargate and Hempstead), noted the report at a meeting this week as they begin the difficult process of setting a balanced budget for 2023/24.

All councils in England are required to do this each year by law and almost all are facing increased financial pressures due to high levels of inflation and increased complexity of need in adults and children’s social care services, among other factors.

Cllr Farooq’s administration, which replaced Cllr Wayne Fitzgerald’s (Conservatives, West) following a vote of no confidence in November, will also have to ensure sufficient support from fellow PCC councillors to pass the budget.

Last year, only one councillor voted against it – an independent – while the Conservatives, Peterborough First and one member of the Greens voted in favour. The rest, including all Labour and Liberal Democrat councillors, abstained, which ultimately allowed the budget to pass.

This year, Peterborough First – a group of 11 – will have to rely on the support of Labour, the Liberal Democrats and the Greens to pass their budget, just as they did to pass the vote of no confidence in Cllr Fitzgerald they tabled.

But bringing the Conservatives on side is trickier: Cllr Fitzgerald, who remains their group leader, repeated at PCC’s most recent full council meeting that his group doesn’t recognise the legitimacy of the new administration.

“Listening to the leader of the council, he’s deluded,” Cllr Fitzgerald said at the meeting. “He talks about political stability but I think he’s mixing it up with political control. You know my view, and I’ve stated it here, that there’s no public legitimacy for it.”

Cllr Farooq and his cabinet say that there’s now greater stability than when the Conservatives ruled in a minority as, combined, all other councillors outnumber them and form an overall majority.

With or without their support, then, passing a balanced budget is possible – but savings must be found, such as through the council’s ongoing and controversial review of its assets which could result in the sales of some community buildings.

The first draft of the new budget is expected in January, after which it will be debated and scrutinised further by councillors before ultimately going to a full council vote.

This will also include the rate of council tax residents can expect to pay over the next year.