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Due to cuts in government funding, and no funding to meet increasing demand for care services or inflation, the council has had to find £159m since 2010. And by 2021 we will have to save at least another £21 million. At the same time, demand on services is growing as people live longer and the borough’s population continues to grow.
We want to protect services for vulnerable people, such as social care for children and adults, whilst also doing our best to maintain other services such as waste and recycling collection, street cleaning and roads maintenance.
By law, we are required to set a balanced budget at the start of every financial year (April to March). We also forecast an estimated budget position for each of the following three years. This approach means we can better plan for the future. We have shared our budget with local community and voluntary organisations, and residents and businesses.
The budget was ratified at Full Council on Monday 24 February 2020. You can read the committee meeting papers on our democracy, elections and civic section.
We provide lots of services that people see, like emptying your bins, cutting grass, clearing litter and mending roads.
But we also provide a lot of services which many people don’t see and which require far more money than providing many of our common day-to-day services. For example, we:
Looking after children and people who need care in their own home takes up around two thirds of our budget – more than we collect in council tax each year.
Our income comes from:
We used to receive money from the government, which used to make up a large proportion of our money, but that has been reduced since the government started its austerity programme in 2010.
Every year the amount that the council needs goes up because of things like wage rises, inflation and increasing numbers of people needing our help.
This means we have to think about what services we can afford to keep providing.
Sometimes it may seem as though we are spending large amounts of money on investments or buildings, whilst making cuts to important public services. Behind the headlines, there are two different ways the council receives, and is allowed to spend, its money.
This is money that we can only use for day-to-day spending like running services, staff costs and paying bills. The money is from council tax, business rates, fees we charge for services and money we make from our assets. It is revenue funding which is affected by government cuts. We aren't allowed to borrow money to fund day-to-day services.
Borrowed money can be used to buy property, such as buildings, equipment and businesses. This type of money is called capital.
We use capital to buy things which will produce an income, which can then be used as revenue. It’s a bit like a buy-to-let agreement, when someone buys a house with a mortgage and then rents it out to someone else. To make it worth their while they would have to be getting enough rent to pay all of the borrowing costs and the costs of looking after the asset and still have money left over. This is what the council does, but on a larger scale. The money left over after all the costs have been taken out is income to the council and can be added to the revenue money for day-to-day running costs. By doing this, we haven’t had to cut services as much as we would have had to.
So, the council does not spend money on buildings and investments instead of services - they are two different funds. The money we make from our capital investments will be used to help run your public services in the future. This is the only way we can plug the gap between increasing demand from our residents and reduced funding from the government.
So when you hear people talking about our investments in solar farms and properties, remember this is from capital funding and can’t be spent on fixing potholes or cleaning streets.
We publish our annual budget for the upcoming year every March. Each year we also produce a Medium Term Financial Plan that analyses the budget and spending over a four year term to allow decisions to be made about spending in line with our corporate priorities.
The budget-setting process for the following year starts around June. Councillors, directors and service managers put forward savings proposals and identify areas for investment, followed by a period of consultation with the public, staff and local businesses, usually lasting for around six weeks in December and January. Our budget was ratified at Full Council on Monday 24 February 2020.