How would you tackle a £6.2 million budget deficit? Peterborough City Council looks to residents for help

Council chiefs are seeking to mobilise Peterborough residents in their battle to tackle an ever-growing multi-million pound budget deficit for the next financial year.

Councillors and officers have already spent months poring over the cost of the many services they provide in a bid to find ways of balancing a budget, which is stubbornly resisting attempts to rein it in.

Now council leaders have embarked on a five week public consultation exercise to find out which type of services are important to city residents and those that are less highly thought of and could bear some cost cutting.

The financial headache for the council has got worse in just a few months.

Earlier this year the budget shortfall for 2024/25 was expected to be £5.1 million. By the start of last month, councillors were told that had risen to £6.2 million with the deficit set to hit £13.8 million by 2026/27.

The amount of cash the council has in reserve is expected to fall from the current £70 million to £35 million by 2026.

While the council has a number of guiding priorities – the economy and growth, places and communities, help and support residents early on in their lives, a sustainable city council, it states: “The starting point is the challenge of finding significant savings over the coming years and to achieve financial sustainability – then, we can invest in our city’s future.

“We will do this by delivering a new type of council, which will enable us to manage demand, help and support people before they reach crisis point, while finding new ways to tackle inequality in our communities by maximising inclusive, sustainable economic growth that benefits everyone.”

Council leader Councillor Mohammed Farooq said the council would invest in services unlike some local authorities that had stopped spending.

But he warned: “In doing so there will be some difficult decisions that we need to make along the way.

“To help us to understand which services you value the most… please take the time to tell us what you think.

"Your feedback will help inform the decisions we make when councillors set the budget on February 21, 2024.”

What is fuelling the rise in spending?

The council says it has already embarked on a programme of savings, efficiencies and transformation.

Yet this is being outpaced by numerous challenges.

The rate of inflation might be falling but only means costs are rising more slowly than before. There is also rising energy costs and there has been an increase in the National Living Wage.

One of the biggest pressures is the demand for services in Adult Social Care and Child Protection and Family Support Services.

In Children’s Social Care, the council spends an extra £4 million on care for young people with very complex needs.

The number of children under a child protection plan has increased from around 101 in November last year to around 242 in November 2023.

The number of children in care is also rising, from 380 in January to 414 in September 2023.

In Adult Social Care, there has been a 59 per cent increase in accommodated care (residential and nursing care homes) and a 46 per cent increase in community care (such as home care or day care) since 2020.

The number of individuals and families requiring support with housing, particularly temporary accommodation, remains high.

Where can we find extra cash?

Essentially there is no magic money tree.

New monies can either come from increasing Council Tax – money paid by residents for local services.

Councillors have already agreed to raise the rate next year by 4.99 per cent.

It will add £79.36 per year (or £1.52 per week) to the city council element of the bill for a typical band D property and take the total city council element of council tax to £1,666.28 (or £32.04 per week).

Such an increase would raise £4.9 million per year towards the council’s rising costs.

The council’s spending power comes from four main sources.

In this financial year Council Tax brought in £95.4 million or 47 per cent of its total £202.5 million income. Business rates came in at £69.9 million accounting for 35 per cent of its income. Revenue support grant was £12.1 million – six per cent of income – and other grants amounted to £25.1 million – 12 per cent of income.

Income from residents through Council Tax and Business Rates can be increased if the city economy can be grown so bringing in more companies and more housing.

Council chiefs are also continuing to look for ways to reduce spending and to get a better deal from service providers, reviewing how services are provided , selling surplus land and buildings, stopping ‘non vital’ services or charging more and reviewing the council’s use of agency and interim staff.

How will the consultation be carried out?

You can take part in the budget consultation by visiting the council’s website here where there are 10 multiple choice and free text questions.

Social media will be used to reach out to as many people as possible, directing them to the details and web form.

Hard copies of the budget consultation can be requested by emailing [email protected].

Key stakeholders and community groups will be emailed with the budget consultation details and will be offered the opportunity to have a briefing on these.