Council facing "tough but manageable" financial challenges as economic crisis bites
Uttlesford District Council is facing "tough but manageable" financial challenges over the next few years as it continues to monitor and respond to the impacts of the UK and global economic crisis.
In February 2022, the council announced a balanced 2022/23 budget alongside a medium-term financial strategy that set out how it would need to make between £3.5 to £4 million savings over the next five years. This was based on the reasonable assumptions and forecasting at that time.
Since then, the national financial picture has changed dramatically and, like all local councils, Uttlesford's budgets are coming under increasing strain. In its half-year predictions based on current forecasts, the council is anticipating it will have to make 20 to 25% net reductions in spending - up to £5 million - by 2027. These predictions already take into account immediate tighter spending controls across all departments and a review of existing budgets to see where further savings and efficiencies can be made.
An option is being developed over coming weeks and months for sale of one or more of the council's commercial assets which may potentially bring down the five-year savings target from £5 million to £3 million.
The contributing factors for the increasing pressures are outside of local authority control and include rising inflation rates and additional utility costs - over £800,000 extra for inflationary costs in goods and services, and especially utility bills (including leisure centres) as well as changes to government policy that would potentially substantially reduce income, such as from business rates.
Cllr Petrina Lees, Leader of the council, said: "Uttlesford is not unique in this - all councils are facing tough financial pressures and we have to keep in mind that some have budget deficits running into hundreds of millions of pounds. By comparison, we are better placed than many councils to weather the storm, thanks to good financial management and our excellent commercial asset portfolio.
"However, there remains much uncertainty over the future of local government funding and we must consider all scenarios and options as we look to develop a longer-term savings plan.
"We will continue to work hard to support our most vulnerable residents and will be thinking very carefully over the coming months about how we address the scale of the challenge ahead in ways that protect vital services as a priority."
A report on the half-year outturn on this year's council budget and financial position will be discussed at a meeting of Cabinet on 1 December.
The council will set its 2023/24 annual budget and Council Tax levels, and also its five-year Medium Term Financial Strategy, in February. Detailed options of how to make the necessary savings over the next five years will be brought forward in early summer 2023.
24 November 2022
► Chief Executive, Peter Holt's narrative on the financial situation
► Medium Term Financial Strategy 2022-2027 [895.23KB]