Progress made on budget shortfall

Additional social care funding announced in the local government settlement and actions to address pressures on some services have reduced our predicted budget shortfall to £17.2million.  

A report presented to Cabinet last September warned of a predicted shortfall of up to £36.7million ahead of any funding announcements from the new government.  

However, with an additional £11.3million announced, our finance officers have been able to update the forecast.

Alleviating pressure  

Efforts to manage costs and demands, as well as to explore different ways of delivering some services, have also helped to reduce the forecast deficit; these measures should help to alleviate the pressure on high-cost and demand-led areas.  

Additionally, we will direct some external funding towards its key priorities.  

The local government settlement has provided a 3.2% increase in core spending power, which – alongside uplifts in other core areas of public spending such as the NHS and education – will have a significant impact on outcomes. 

However, we have emphasised that this does not fully cover the growth in demand across areas like social care and homelessness.  

Decisions on how to address the remaining £17.2million budget shortfall will, therefore, still need to be made before councillors agree our budget in February.  

A better place than previously outlined

Councillor Jacob Taylor, Deputy Leader and Cabinet member for Finance and City Regeneration, said: “We are in a better place in terms of setting a balanced budget for 2025/26 than had been outlined in September.  

“Thanks to the confirmed increase in local government funding from central government – as well as the excellent work carried out by our teams here at the council to find different ways of working – our budget shortfall looks as if it will be significantly less than the £36.7million previously forecast.  

“However, we are still predicting a sizeable budget shortfall, which we are working hard to address.  

“Difficult decisions will still need to be made in order to set a legally balanced budget, but we are in a much better position than we were a few months ago.”