Further tough decisions will be needed over the coming weeks as the City Council continues to address extraordinary budget pressures caused by rapidly rising energy costs and other national and international factors.
Cabinet member for Finance Mark Shayer says the Council’s recovery plan will leave no stone unturned to identify ways of reducing costs to deal with the unprecedented budget pressures it is facing for this stage in the financial year.
Councillor Shayer said: “Last month we identified a potential overspend of £13.6 million, caused in large part by national issues beyond our control which are impacting all councils across the country. Since then we have been working hard to identify savings but at the same time have also identified further unavoidable increases in our costs.
“Our additional costs this year now amount to £14.8 million but the work we have done so far means we are in a position to reduce the projected overspend to £8.7 million – a saving of £6.1 million already. This is good progress but it remains a very serious position to be in at this stage in the financial year, especially when we know we will have a very significant shortfall in the resources we need to set a balanced budget for next year.
“We have now launched a recovery plan that includes thorough reviews of all fees and charges, our procurements and contracts, our capital programme costs, management of debts, reserves, grants and subsidies, our buildings and estates and our current transformation initiatives.
“This is urgent and we have to take decisive action. We will leave no stone unturned or opportunity missed to identify ways of reducing costs as overspending is simply not an option. As a political leadership team we are treating this like we would a serious emergency and will be taking positive action to address it.
“While we want to protect services as much as we can, with a budget shortfall this large we simply can’t expect to be able to carry on doing everything we currently do to the same level. Until we get a clear indication of the amount of government financial support, if any, we may have to pause or withdraw some discretionary services. Statutory services of course remain protected.”
A report to Cabinet on 8 September says authorities across the country are facing similar issues due to rising costs. Plymouth’s cost pressures include £7 million of non-controllable costs, including a £4.3 million rise in energy costs. The Council is forecasting that gas bills for its buildings estate, including the crematoria, will increase from £334,000 to £984,000, while electricity bills will increase from £1.3 million to £2.7 million.
The energy costs of lighting Plymouth’s streets will rise by £1.1 million and fuel bills for the Council’s fleet of more than 200 essential vehicles such as refuse lorries have risen by more than £64,000. The ongoing impact of the pandemic is also being seen in other rising costs and demand pressures. Changes to people’s working habits have led to an increase in the amount of domestic waste that needs to collected, adding to our annual collection costs. Demand for social care and emergency accommodation has also increased, while income from parking and libraries has decreased.
Councillor Shayer added: “This is not a position that any Council administration wants to be in but this emergency has happened on our watch and we will deal with it.
“We are very conscious that families in Plymouth are experiencing the same issues at home that we are as a council, with bills rising to a level no one could have anticipated. We will always listen to the views of all councillors and especially Plymouth residents as we go through this process.”