Peterborough City Council reserve levels ‘not sufficient’ as authority works to close overspend gap

Peterborough City Council faces a battle to reduce its overspend figures in order to improve its insufficient reserve levels.

A joint meeting of the city council scrutiny committees took place on January 29 to discuss the proposed budget for the forthcoming year and medium term financial strategy for the next three years.

The authority faces a large gap in its budget, but is hoping to balance its books via a series of savings totalling nearly £22 million.

As well as various proposed cuts to services, the council has also proposed to hike council tax by 4.99% for the next three years.

Peterborough City Council’s estimated overall reserves total around £14 million for 2024/25 as opposed to £45 million the year before. The council currently faces a forecast overspend of £5.4m.

In a report put before the joint meeting of the scrutiny committees on January 29, the city council’s chief finance officer (CFO) Cecilie Booth warned that the estimated reserve balances are low and would not be sufficient to mitigate all of the risks associated with the proposed budget.

She added: “It is therefore essential to maintain spending controls to protect the current level of reserves and to increase General Fund reserves to at least 5% in the near to medium term. Reserves will remain under close review.”

At the meeting, deputy leader Mohammed Jamil, cabinet member for finance and corporate governance, said: “The statutory statement by our CFO makes clear that the budget contains a moderate to high degree of risk and our reserve levels are not sufficient to manage the risks.

“It remains imperative that we continue to close the £5.4 million overspend in the final quarter of this financial year, which will improve our reserves position.

“During 2025/26 it is essential that all savings are delivered on time and in full, in addition to other pressures and risks being fully mitigated.

“By delivering these expectations, we will improve the council’s financial resilience and put ourselves on a more sustainable financial footing for the future.”

Councillor Jamil said the budget setting process had been “one of the most challenging years yet”.

The latest budget report reads: “A balanced budget for 2025/26 is proposed but the council’s overall financial resilience remains challenging. It is essential that the savings identified in the budget are delivered in full to protect the current low levels of reserves.”

A public consultation closed on January 14 in which residents were asked for their views on draft budget proposals.

This year, the council received 1,427 responses, which is more than a 1,000% increase compared to the previous year of just 132 responses.

It is understood that the proposed mothballing of the Lido had an impact on the large number of responses, with many opposing the plans and the council ultimately deciding to keep the Lido open.

The proposed budget will next be discussed at a cabinet meeting on Tuesday, February 11.