Medway Council’s financial position has improved in figures announced today and firm action is underway to balance the budget by the end of the financial year.
Next Tuesday, 21 November, Medway Council’s Cabinet will be considering the results of the second round of the council’s revenue budget monitoring. The forecast now reports an expected pressure on the budget of £12.251million which represents an improvement of £5.016million on the position reported at the end of the first quarter.
- A reduction in the projected overspend in the Children and Adult Services Directorate of £1.7million although a pressure of £10.8million remains due to challenges such as placement costs and the necessary reliance on agency social workers.
- A reduction of £1.5million from quarter one for the Regeneration, Culture and Environment Directorate with a remaining projected overspend of £816,000. This has been helped by strong membership growth at the council’s sports centres, as well as additional income from the Rochester Corn Exchange.
- Increased spend predicted on the homeless budget due to a rise in the requirement for temporary accommodation which has risen from 366 to a predicted 432 households.
- A projected underspend within Frontline Services of just less than £1million, representing an improvement of £1.409million from the position reported at the end of quarter one. This includes a saving on street lighting due to reduced costs for commercial supply and usage as a result of the use of LED lighting.
- Increased pressure on the council’s regeneration budgets of £677,000.
- Business Support Services is forecasting a reduced overspend of £2.568million, down more than half a million pounds, which is due to a shortfall on the benefits subsidy where the government is no longer fully funding the housing benefit the council pays to residents.
Strenuous efforts continue to be taken across the council to reduce costs and generate additional income to bring expenditure back within the budget agreed by the council earlier this year.
In a further step, the council has commissioned the Chartered Institute of Public Finance and Accountancy (CIPFA) to work alongside teams to undertake a Resilience Review of the council’s finances, with the work scheduled to conclude before the end of December 2023. A team of highly experienced, independent specialists will be working with the council to review what its services cost and how they operate, to identify opportunities to reduce costs, increase income and improve service delivery. The council will also be supported through a scheme jointly commissioned by the Local Government Association (LGA) and the Association of Directors of Adult Social Services (ADASS), as ‘Partners in Care and Health’ to undertake a specialist review focused on the council’s delivery of Adult Social Care, and these two reviews will be working in parallel to help the council to deliver the savings required to achieve a balanced budget for 2023/24 and to set a sustainable budget for 2024/25 and beyond.
Taking positive steps
Commenting on the latest figures, Medway Council Leader, Cllr Vince Maple, said: “I am encouraged that the financials are heading in the right direction and I remain committed to taking every step needed to balance the budget by the end of the financial year. There is still some way to go but by taking the positive steps to bring in experts to help support us in working to reduce costs, increase income and improve service delivery I am confident we will meet our goals.
“The financial stability of a huge number of local authorities across the country is now on a knife-edge and we hear daily of councils warning of their impending inability to balance their budgets. We are continuing to deal with the Medway challenge of a 91 per cent cut to our revenue support grant since 2010. It is critical that the government takes urgent heed of the need for a fairer settlement for councils, to ensure that critical services for residents particularly the most vulnerable in our society, can be maintained. As agreed at our recent Full Council, we call on the government to ensure they take action in the Autumn Statement next Wednesday.”
The Cabinet will also be considering the council’s initial draft capital and revenue budgets for 2024/25 which will be finalised over the coming months ahead of approval by the council in February 2024. Final proposals will depend on factors including the Local Government Financial Settlement, but initial figures published in September 2023 projected a potential budget gap of £38.947miillon. Anticipated growth in the council’s income has now reduced that gap to £35.798million of savings required to achieve a balanced budget.
A new approach to balancing the budget is being proposed for the coming year, requiring each directorate to operate within an agreed budget allocation, assuming the delivery of savings and additional income will balance net expenditure to the budget allocated.
Additional resources identified by the council would be across different areas. An additional allocation of £8.811million will go into the Children and Adults Directorate, reflecting the prioritisation of statutory services for the council. An allocation is also being made to address cost of living challenges and offer competitive salaries that will enable the council to recruit and retain the best employees rather than rely on expensive agency staff, which has historically been the case. Funding will also be allocated to address the pressure arising from the use of reserves to fund the 2023/24 budget and increases in external levies.
Other projections proposed for the budget consideration over the coming months include:
- the receipt of a total of £158.601million in Council Tax;
- the receipt of £55.839million through Retained Business Rates;
- change to council premia charged on long term empty and unfurnished properties raising an additional estimated £500,000 in 2024/25 and on unoccupied but furnished properties from 1 April 2025 that would generate an additional estimated £532,000 in 2025/26;
- removal of some council tax discounts on empty residential properties.
Amongst other initiatives the council is also proposing steps to:
- carry out reviews of those eligible for Council Tax Single Person Discounts to ensure that any changes of circumstance for those previously eligible for the discount are corrected;
- enhance debt recovery arrangements including the use of a new system to identify debtors who have low ability to pay (and direct them towards welfare, debt and advice) from those who have a higher ability to pay, and to direct recovery efforts towards the latter;
- ensure more efficient collection of debt recovery through robust collection;
- carry out more timely routine new property inspections to ensure completion notices can be issued as soon as practically possible to secure council tax income streams.
Over the coming months council officers and councillors will continue to review opportunities to reduce costs and increase revenue in the period leading up to the Cabinet and Full Council meetings in February as well as seeking input from all Overview and Scrutiny Committees.