Redcar and Cleveland Borough Council today called for a fair deal from Government when funding for local authorities is allocated next month.
The Government is due to announce next year’s funding levels for each local authority at a time when Redcar and Cleveland Borough Council – along with similar authorities – is facing a huge shortfall in its finances due to inflation and service demand.
The Council is appealing to ministers to take into account contributing factors which drive demand, such as deprivation and an ageing population, both of which contribute to an increased need to provide social care, something which is putting huge pressure on the Council’s finances.
Redcar and Cleveland also has a greater proportion of properties in the A-C Council Tax bands, meaning its income from any potential increase in Council Tax is much lower than local authorities with housing of greater value.
The Council anticipates an overspend of around £8 million by the financial year-end in March next year and is looking at various options to reduce and minimise this overspend.
However, some of the causes of this overspend remain very volatile and outside of the Council’s control.
The financial pressures on the Council are expected to continue into the budget for 2023/2024 and a potential shortfall of around £16m is anticipated prior to announcements in the autumn statement being set out in the local government finance settlement.
When the Government determined the level of funding required by local government for this year, inflation was forecast to peak at 4% this year.
However, the most recent figure is 11.1% and there is no indication that this will fall in the near future.
This level of inflation has significantly increased the cost of providing all Council services and this, along with the price of energy, accounts for a significant proportion of the anticipated overspend.
At the same time. there is also increasing demand for Council services – especially in social care – and the cost of providing these services has risen sharply. In particular, the Council is experiencing huge demand for services to help and care for children and families and a steep increase in the cost of home to school transport.
Cllr Glyn Nightingale, Redcar and Cleveland Borough Council Cabinet member for Resources, said:
“We are facing a perfect storm of rising prices and increasing demand. The funding we receive falls far short of meeting this.
“Redcar and Cleveland has high levels of deprivation, child poverty and an ageing population. This frequently translates into increased demand for children’s social care and a high number of older people who also need our support.
“We must help those who cannot find help elsewhere but doing so means more and more of our resource is directed towards providing social care, rather than to other services our residents need and expect.
“The council has limited ability to raise more money through Council Tax. Providing services in a borough which has both urban and rural areas increases the challenge.
“We already face making some very unpalatable decisions about the services we provide but we hope and expect the Government will recognise the very real challenge our council and others like us face and allocate funding to address this.”