The coronavirus pandemic and years of government funding cuts has left the Conservative-run council with a substantial black hole and pleading to the Government for help.
The authority today (Friday) revealed a number of proposals to begin tackling the huge shortfall, but even if they are voted through in December this will only clear £2.7 million of the deficit, leaving substantial savings still needing to be made early next year.
Legally, local authorities are not allowed to plan for a budget deficit.
Among the first set of proposals outlined for the 2021/22 budget are:
. A rise in the charge to collect brown bins for garden waste from £45 a year to £50.
. The switching off of some lights between midnight and 5am
. Investment in a communities project which has been successful during the pandemic
. Large increases in spend due to more children and adults needing care.
Cllr David Seaton, cabinet member for finance at Peterborough City Council, said: “This first phase of proposals details how we will save £2.7 million in 2021/22 but there is a significant task ahead - one that we cannot meet without government support.
“The scale of the challenge next year will require additional funding and solutions as we cannot meet the deficit by savings alone. This is why we are discussing potential solutions to the financial situation that we and many other councils face with the Ministry of Housing, Communities and Local Government (MHCLG).
“The outcome of these discussions will be crucial to the second phase of proposals and being able to deliver a balanced budget next year.”
The council, which is still waiting to hear how much government support it will receive ahead of March’s deadline to set its budget, said: “The Covid-19 pandemic has placed an unprecedented strain on Peterborough’s future financial stability.”
Financial pressures as a result of the pandemic include:
. A forecast loss of £2.4 million in parking revenue
. A council tax deficit of £2.8 million
. A business rates deficit of £7.2 million
. An additional £13.8 million on providing enhanced adult social care services during the pandemic
. An inability to make £5.5 million of planned savings.
The council has seen its government funding reduced by more than 70 per cent (£58 million) since 2013/14 despite Peterborough being one of the UK’s fastest growing cities.
The authority added that its current level of funding is “not coming close to meeting the demand for services” despite generating £78 million of external income annually.
Council leader Cllr John Holdich said: “Although the pandemic has placed unprecedented strain on our services, it has also demonstrated the vital role that councils play in the lives of residents and in supporting businesses, particularly in times of crisis.
“Despite the pressures of the last year, we have continued to maintain good quality services and outcomes for residents and taken big strides forward with the redevelopment of the city centre and in furthering our vision for the city as a whole.
“The challenge that we face to deliver a balanced budget next year is the most challenging that we have faced, but we will continue to work closely with our MPs and the Government to find a solution so that we can continue to work hard to keep people safe, support our businesses and to keep our city moving forward.”
Leader of the council’s Green group Cllr Julie Howell said: “While the council has done an amazing job of supporting and protecting our communities over the course of the Covid-19 crisis, it is clear that we are not out of the woods yet.
“While difficult decisions have to be made, we urge the council to keep its commitment to tackling the climate emergency in mind, as there is no greater crisis than the threat to our very existence.
“To come through this difficult period we need to make sure that everyone’s basic needs continue to be met. We urge the council to accelerate its work on the development of its Food Strategy for Peterborough, which was adopted at the recent meeting of the Full Council, and to prioritise any schemes that build resilience in our communities and keep people well as council budgets and household budgets come under increased strain.”
Leader of the council’s Labour group Cllr Shaz Nawaz said the situation “seems like Groundhog Day” and is a result of austerity measures implemented by a Conservative government, as well as the pandemic.
He added: “The general public is aware that we have the fiasco every year. Cuts, cuts and more cuts is what they have had to face. The city needs a new vision. We need more investment. We need to better support people by upskilling them. We need better support for children at school.
“We need to take the city in a new direction and that will only happen if we have a change in administration or else we’ll have to continue going through the same financial saga again and again.
“The people of this city deserve better. This budget does nothing to improve the lives of residents. It just repeats the same old pattern. What’s worse is this time we have had to go begging to the government to ask for payment holidays.
“We are facing a cliff edge and we need to move the city towards a positive and brighter future. I am afraid the Conservatives have consistently failed to deliver that for the people of this city.”
Leader of the council’s Liberal Democrat group Cllr Nick Sandford said: “The net effect of this Phase 1 budget is to increase next year’s deficit from £14 million to £35 million.
“It looks like a budget spiralling out of control: for example, Aragon Direct Services expenditure is projected to increase by over 1.5 million.
“Even in that context there are a few worrying increases in charges and cuts in service. The council knows that their disastrous brown bin charge has resulted in a failure to meet recycling and composting targets and an increase in waste being incinerated, yet they are now proposing to increase the charge by up to 65 per cent for some users.
“Some street lights are to be turned off overnight and others reduced further in intensity - how does this fit with the council’s stated intention of encouraging walking and cycling when by next weekend it will be dark at 5pm?
“As an alternative they could start with repairing some lights in the new town areas which have been burning 24 hours a day for nearly two years.”
Residents can share their opinions on the proposals by completing an online survey on the council website - www.peterborough.gov.uk/budget. Hard copies of the budget can also be requested by emailing [email protected]
A consultation on the proposals will close on December 7 at 5pm.
The Cabinet will consider comments on Monday, November 30 and Full Council will vote on the proposals on Wednesday, December 9.
Further budget articles will appear at www.peterboroughtoday.co.uk.