Nottinghamshire County Council says huge funding shortfall causes by coronavirus means council tax would have to rise by about 10%
Nottinghamshire County Council has said a huge funding shortfall caused by coronavirus means council tax would have to rise by about 10% from next year to keep non-essential services running, writes Local Democracy Reporter.
A sharp increase in demand for services, unexpected costs like PPE and a decrease in income, has caused huge pressure on council finances across the country.
Some funding has been given to councils from the government, but this Conservative-led county council is expecting a £51m shortfall over the next three years.
It said it was continuing to make the case to the government that more funding was needed, but that it was ‘unlikely’ all of its costs would be reimbursed.
At the start of the crisis, Chancellor Rishi Sunak said the government would stand ‘shoulder to shoulder’ with councils.
Now, the council’s finance chief Richard Jackson said the council would have to take its share of the burden.
He said a council tax increase of 10% would be unpalatable to the council, but also said job losses at the council was ‘the last thing we want’.
Further, Mr Jackson said after 12 years of making savings, there were not any areas of spending the council wanted to cut.
He said local government reorganisation — the scrapping of boroughs, districts and the county council by replacing them with one council to cover the whole of Nottinghamshire excluding the city — would save up to £30 million a year.
Mr Jackson represents Toton, Chilwell and Attenborough for the Conservatives, and is the chairman of the Finance and Major Contracts committee which will scrutinise the council’s financial position next week (Monday, July 20).
Speaking on Wednesday (July 15) he said: “The money that has been spent absolutely had to be spent.
“Whatever needed to be done to keep people safe was done, whatever needed to be spent was spent.
“The £26m (shortfall this year) is a best estimate, but there are a lot of unknowns, for example school transport — schools will go back in September we don’t know what restrictions there will be with social distancing, will we have to put on twice as many buses for example?
“As we have made estimates in the last few months generally, they have only been revised upwards.”
Asked about the 10% rise in council tax, he said: “A 10% rise in council tax would be unacceptable to the public and to the council, certainly unpalatable to us, it’s certainly not our intention.
“It’s an indicative number so people can understand what the cost of this is to us.
“I think there are other ways we can plug the gap. Local Government Reorganisation (LGR) would bring about up to £30m in savings per year.
“I think the Chancellor has talked about £190bn as the cost to the government of this crisis, to go back and ask for more money for local government when they’ve put £8bn in so far, I don’t think that’s going to be the answer either.
“I think we’ve got to look at how we organise ourselves.”
Asked about where further savings could be found, he said: “We are 12 years into this savings programme, and over those years we’ve looked at all of these things. There’s nothing further that we want to find savings from.
“We don’t want to go back and look at cuts to services people rely on, it’s the last thing we want to do, especially as on the table is a better answer and that’s LGR.”
Asked whether he thought in the short term there were likely to be job losses at the council, Mr Jackson said: “This is the last thing we want.
“We know we’ve seen a reduction over the last 12 years and we’ve seen how hard people have worked over this crisis period, and again it can be largely avoided if we can get LGR.”
Asked about whether he thought Chancellor Sunak’s had come good on the pledge to stand ‘shoulder to shoulder’ with councils, he said: “I think we’re sharing the burden. I’m not sure back in March anyone really thought there would be a £190bn of costs for the government.
“So if there are things locally we can do to reduce costs we need to be looking at it.”
On whether the potential for service reductions should further government funding and LGR not materialise, he said: “We have to balance a budget at the end of the day. There are things we have to do and things we do by choice. There are only so many places we can go to to save money, but again it’s absolutely the last thing we want to do.”
“We’ll continue to work to persuade the government that there is a need for funding. We work through the Local Government Association and the County Councils Network to demonstrate that and we lead on that work.
“We are working hard to do that but we can’t bank on a hope for additional funding from the government, we have to look at real tangible things locally.
“We hope we can persuade the government that there is a need for more funding but I don’t think it’s going to be of a level that would solve all of the problems, so we have to look elsewhere.
“Given the scale of the financial impact on the government it’s unrealistic to expect (the shortfall) to be met entirely.”