Council savings update

Continuing financial pressures on local government budgets mostly due to decisions by central government mean that Bristol City Council, like all local authorities across the country, is having to re-appraise its savings target for the next two financial years.

The four-year Medium Term Financial Plan identified the need to make £70 million of cumulated savings by 2014/15. So far the council has already made £55 million savings over the two financial years of 2011/12 and 2012/13.

However ongoing budget pressures reported on during the year will mean that a further £35m to £40 million (depending on the decision on Council Tax benefit) will need to be found over the next two years with a target of £20m to £25 million for the next financial year, 2013/14.  This figure would increase by a further £4.5m if council tax is frozen rather than an assumed increase of 2.5%.
 
The increased budget pressures include:

· Changes to the Council Tax Benefit system as part of the Government’s Welfare Reform changes. The council is currently consulting on three options to find the £5 million shortfall. 
· Loss of Academy funding grant of £2.5 million
· Loss of the Council Tax freeze grant of £4.5 million (this assumes a 2.5% Council Tax increase next year)
· Borrowing and revenue costs from additional capital investment of £3 million
· Spending £7 million to reduce the size of the organisation and make it more efficient
· Increased pressures on safeguarding vulnerable children of £3 million

Cllr Tim Kent, Cabinet Member responsible for the revenue budget, said: “The Budget for the next financial year will be the first big decision for the newly elected Mayor to take and as usual officers are preparing detailed options they can consider for achieving this target.

“As we approach the official campaign period, it is important to make clear the very real budget pressures that the city council and local government as a whole is facing. Mayoral candidates will no doubt want to make commitments, but if they have capital or revenue implications, then further savings will need to be identified.

“We have made £55 million savings so far which has been challenging but has been achieved with determined effort by cabinet colleagues and officers, particularly in stripping away back-office administration costs. The continuing UK-wide budgetary situation means that this rigour will need to continue for the foreseeable future.”