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Council forced to consider radical savings plan to close £37.6m budget gap

Plymouth City Council’s Cabinet is considering an urgent package of measures to address an unprecedented £37.6 million budget gap caused by issues that are impacting local authorities across the country.

The Council has already been grappling with a £15.5 million shortfall in this year’s budget caused by factors such as inflation, huge increases in gas and electricity bills and rising demand for critical social care services. 

A report to Cabinet on 10 November says the same national factors are leading to a projected £37.6 million shortfall in its budget 2023/24. 

The report sets out a range of proposals that would reduce costs by £26.2 million to help enable the Council to fulfil its statutory duty to set a balanced budget. 

If all the potential savings are approved, the Council will still be left with a £11.4 million shortfall to be closed before a balanced budget can be set in February. 

At the same time it needs to find another £6 million of savings in order to close this year’s gap. 

Council Leader Richard Bingley said: “All councils, including ours here in Plymouth, have been hit by historic, unprecedented levels of soaring fuel, wage and other inflationary costs.  

“This has had an overwhelming impact upon the costs of our vehicle fleets, building operational costs, street lighting and staffing. Put simply, experienced council leaders and chief executives across the region are all telling me that, very sadly, they have seen nothing like this scale of financial challenge before.  

“Quite rightly, we also have a legal duty to balance our city’s annual budget. Failure to seriously grip our public finances, will leave our city open to intervention from central government commissioners, and this is not an option, nor a risk, that this administration is willing to take. 

“We are leaving no stone unturned to identify ways of reducing costs and are determined to protect local services as best we can, particularly those that support the most vulnerable in our community. 

“We are doing this in an urgent but considered way and our recovery plan is focusing on modernising, generating income, increasing efficiency and making difficult decisions to change, pause or stop things. 

“Reducing local services is the very last thing any of us came into public service to do but we simply can’t duck our responsibility to make unpalatable decisions. The consequences of not being able to set a balanced budget would be catastrophic for our city. 

“Wherever possible we are trying to squeeze out even more efficiency in what we do. With the cost of living crisis we know families in Plymouth are dealing with rising bills in the same way we are and the last thing we want to do is add to that burden, so we don’t propose increasing our fees and charges lightly. However, some of our costs rising by up to 20 per cent we have no choice but to increase fees and charges to cover increases in our bills. 

“This is an important issue for the city as a whole and we will be seeking the views and ideas of all elected members – regardless of political party – as well as those of Plymouth residents. We will be asking residents to give their views on our saving proposals so far, as well as their ideas for what else we can do to protect local services, through an online form our website.” 

The proposals being considered by Cabinet affect all areas of the Council. 

They include:  

  • Introducing charges for collecting garden waste – Plymouth is one of the few authorities remaining not to already charge for this non-statutory service 
  • Increasing fees and charges by 10 per cent this year and next year
  • Increasing parking fees in line with proposals recently consulted on
  • Reducing costs in children’s social care, including working with families to keep more children at home, reducing the use of residential care and reviewing organisational structures
  • Managing and reducing demand on adult social care
  • Reviewing early help provision and children’s centres, alongside partners
  • Reducing subsidies for bus services that cannot be run commercially 
  • Reviewing senior management 
  • Vacating buildings earlier than planned

Residents will be able to give their views on the budget proposals through an online form that will be available on the Council’s website from Friday 11 November. The feedback will be considered by all elected members before final budget decisions are made.

The Cabinet will discuss progress in reducing the budget gap for this year and next at its meeting in December. The final budget for next year is due to be set by the full council in February.