Fenland District Council facing ‘significantly higher’ shortfalls in future years

Significantly higher’ shortfalls in Fenland District Council’s budget are being forecast in future years.

Papers published by the authority state that the projected shortfall is forecast to increase year-on-year, reaching over £4million in 2029/30.

However, Councillor Chris Boden (Conservative), leader of the district council, said he was “certain” these deficits would be reduced, as he said the forecasts were based on no additional action being taken by the authority.

Currently the district council is forecasting a budget gap of £2.658million in 2025/26.

The report published by the authority said the projected shortfall is forecast to increase year-on-year, reaching £4.061million in 2029/30.

While the report stated that projected shortfalls in a council’s medium term financial strategy “are usual”, it said the latest forecast figures for the district council were “significantly higher than than previous years forecast”.

The current forecasts are based on there being no increase in council tax.

The report said the shortfalls forecast represented a “significant challenge” and that any decision this year not to increase the level of council tax “increases the scale of that challenge”.

The report also said the district council was facing a shortfall of £536,000 this financial year due to increased costs.

These include £101,000 spent on legal fees relating to the Wisbech incinerator; £303,000 spent on additional staffing costs in the planning service due to “difficulties in recruiting and retaining” staff; additional £117,000 of Internal Drainage Board levies; and an additional £376,000 spent on providing temporary accommodation for homeless people.

The report added that some of these additional costs had been offset through some higher than expected levels of income, including a £204,000 additional homelessness prevention grant.

The papers said this year’s shortfall will be monitored and that spending levels would be reviewed to “ensure where possible the amount to be funded from reserves at the year-end is minimised”.

At a cabinet meeting this week (December 16) Cllr Boden said there was a lot of “uncertainty” around council finances, including not yet knowing how much money the district council will receive from central government, although he said the authority hoped to find this information out later in the week.

However, Cllr Boden said he was “certain” the deficit predicted in future years would be reduced, as he said the figures in the report were based on no new actions being taken to reduce the shortfall, which he said would not be the case.

He said: “It is abundantly clear that we have some specific issues which need to be addressed.

“Our trading accounts continue to be a drain upon the authority, we continue to have the problem of the cost of the Internal Drainage Board levies, we have the issue of homelessness in particular, which is a very significant drain on our resources and it continues to be significantly above the budgeted figure for the current year.

“We have quite a number of areas where we will have to take action, where we know we are going to need to take, or are currently planning to take.

“Additionally, there is a programme of transformation that is being undertaken at the moment where all of council’s services are being looked at with a view to how they can be performed and we can have the same outcomes that we currently have, but doing it in a more efficient and effective way.

“On top of that there will also be consideration, that I am sure members will need to have given the numbers that we may be facing, about the quantum of actual output that we have in various areas, and that is a political matter that we will have to take responsibility for at the appropriate time.

“This is the first indication of where we may stand as far as 2025/26 and beyond is concerned.”

Councillor Steve Tierney (Conservative) said it was “admirable” that the district council did not plan to ‘simply’ raise council tax to address the challenges.

He said they understood the authority needed to “keep the strain off of local people” by making “difficult choices” until it was “impossible to do otherwise”.

Cllr Boden said it was “quite possibly not realistic” for the district council to assume it would not raise council tax over the next five years.

He said the authority may find itself facing having to “make the choice between unpalatable changes or increasing council tax”.

However, he said the district council would look at where it could save money before it considered raising council tax.