Message from Councillor Mark Lowry
Cabinet Member for Finance
In Plymouth we are not alone in experiencing huge pressures on our finances due to reducing funding from the Government, high inflation and exceptional demand and cost pressures in social care services.
And like everyone’s household bills, our external costs have also been rising steeply at the same time as the cost-of-living crisis is causing more people to need vital social care and housing support.
Our financial position is serious, but we are determined to avoid ending up in the same position as several other councils who are in effect having to declare themselves bankrupt.
We are doing whatever we can bring as much stability to the Council’s finances as we can to protect valued local services.
As part of this, we recently agreed a medium-term financial strategy to guide the Council’s budget management over the next few years. This shows that we will have to take firm action to protect against very serious challenges ahead.
There will be some very difficult decisions to make but we can promise that we will be relentless in seeking to provide the best possible value we can for Plymouth residents.
You can help by giving your views about what what’s most important to you and your ideas for helping us balance the books. Please take a few minutes to complete the survey and have your say.
Have your say
We want to hear the views and ideas of Plymouth residents before we set the Council’s budget for next year.
Spending money wisely and providing value for money are at the heart of our ambition to build a Better Plymouth.
We have a legal duty to balance our budget each year and just like Plymouth residents, we’re also feeling the pressures that are driving up the cost of living, such as increased inflation and energy costs.
Your views will help us set a budget which rises to this financial challenge and delivers best value, high quality services that will improve the lives of our residents.
You can find information below about some of the financial challenges we are facing, where we receive funding from and the current priorities for Plymouth.
This survey finished on Monday 11 December.
Our priorities for Plymouth include:
- Tackling crime and antisocial behaviour
- Cleaner greener streets and transport
- More homes for social rent and affordable ownership
- Attracting investment, jobs, skills and better education
- Keeping children, adults and communities safe
- Working with the NHS to provide better access to health, care and dentistry.
We are also prioritising:
- Making Plymouth a great place to grow up and grow old
- Minimising the impact of the rising cost of living on Plymouth residents
What we do
Your Council plays a big part in daily life in Plymouth. We spend more than £200 million a year on providing more than 300 services that are used by Plymouth residents every day.
These include collecting your waste, maintaining roads, looking after parks and green spaces, protecting the environment, making Plymouth a safer city, providing libraries, ensuring children and young have the best start in life and providing social care for older and more vulnerable residents.
We also grow Plymouth’s economy, secure investment in Plymouth and support the creation of new jobs and homes.
Key facts and figures - Text version
- 265,000 people live in Plymouth
- There are 126,180 homes in the city
- There are 486 looked after children
- 3,600 adults receive social care services
- 73,800 tonnes of refuse and recycling are collected from Plymouth homes every year
- We maintain 31,066 street lights
- We look after 873km of roads and 903km of footways and cycle paths
- 451,640 books and eBooks are loaned in our libraries
- 255,186 people visited The Box last year
- We attracted £41m of foreign direct investment last year
- 2.3 million people visited our website last year
Understanding our budget
We deliver more than 300 services – as diverse as bin collections, protecting vulnerable children, providing libraries, making planning decisions, attracting investment and jobs in the city, providing leisure facilities, providing parking, maintaining roads and pavements and looking after Plymouth’s parks and green spaces.
These services are broadly split into 2 types:
- Those that we are required to provide by law (statutory services)
- providing education services
- children’s safeguarding and social care
- adult social care
- waste collection
- planning and housing services
- road maintenance
- providing a library service.
2. Those that we provide for the benefit of city residents but are not required to by law (discretionary services).
These include most other services such as cutting grass, maintaining parks, providing leisure facilities and events and collecting garden waste.
We have two very separate budgets that support these services: one for ‘revenue’ and one for ‘capital’.
Revenue funding is what pays for the hundreds of services we provide every day – as well as our running costs like such as salaries and wages, fuel, utility bills and contracts with those who provide goods and services for us. The money for our revenue budget comes from Council Tax, charging users for the services, Government grants and a proportion of local Business Rates.
Capital funding is the money we spend improving the council’s assets and Plymouth infrastructure such as road improvements, improvements to schools, delivering new assets such as The Box and purchasing assets such as land and buildings. The money for capital expenditure comes from income sources such as capital receipts (from selling land or buildings), borrowing, contributions from developers to contribute to local infrastructure when we agree planning permissions (section 106 agreements) and specific grants.
Our budget challenges
Delivering all our services is becoming increasingly challenging as around 70% of our total revenue budget is spent on social care services – such as supporting the elderly and looking after children and young people – that we are required to provide by law. These services are seeing big rises in care costs and in demand.
Budget for 2023-24
Budget for 2023-4 - Text version
- Community and Place £27.7m (13%)
- Children and Young People £62.3m (28%)
- Running the Council £30.2m (14%)
- Adult Social Care and Public Health £98.2m (45%)
Balancing the books each year has become increasingly difficult. The Government has substantially reduced the amount of funding it provides to support local services and instead expects more of the funding to come from local taxes.
How the Council is funded
How the Council is funded - Text version
- Government grants £25.8m (5%)
- Social Care Precept £34.3m (6%)
- Public Health grant £16.5m (3%)
- Benefit subsidy £51.2m (9%)
- Schools grant £82.2m (15%)
- Charging for services £36.8m (7%)
- Other income £95m (17%)
- Business Rates £75.3m (14%)
- Council Tax £130.6m (30%)
Government funding for Plymouth
Our revenue support grant from the Government in 2010 was £123.8m. This year it is £11.6 million.
This has meant that between 2014/15 and 2023/24 we’ve had to make a cumulative total of £185 million savings.
To compound the problem, we are now also facing steep rises in our costs due to national factors beyond our control, not least the ongoing increase in the cost of living, high levels of inflation, interest rates and energy prices.
The legacy of the pandemic and the cost-of-living crisis are also contributing to major demand and cost pressures in adults and children's social care and a rise in homelessness and families needing temporary accommodation.
Additional pressures - Text version
- Adult social care - Rising cost and volume of care packages £1.3m
- Homelessness - Increasing demand and costs, with record numbers needing bed and breakfast accommodation £2.25m
- Children's social care - Increasing demand and costs for supporting vulnerable children and young people £3.1m
- Home to school transport - Rising costs £1.5m
Our aim is to continue managing the Council’s finances carefully and avoid the severe problems experienced by some councils that have been unable to set a balanced budget.
How we propose balancing the books and protecting services
We aim to protect valued local services by continuing to make savings by:
- Driving greater efficiency in everything we do, including reducing ‘back office’ costs of running the Council
- Maximising grants and income wherever possible
- Continuing to find new ways to provide services, joining up with partners wherever possible and to make the most of the Council’s assets
- Working proactively to reduce the cost demand pressures in children’s services and homelessness by proactively supporting families before their position becomes a crisis
- Continuing to drive growth in Plymouth’s economy. Supporting and creating jobs helps maintain income to support local services.
- Fighting to ensure Plymouth to get its fair share. We have been short-changed by the Government and will continue to fight for the support Plymouth needs.
Our draft budget for 2024/25 aims to:
Protect public facing services that people tell us are priorities, such as street cleansing, looking after green spaces, road repairs and tackling litter and fly tipping. There are no reductions proposed in the budgets for these services.
Enable more frequent mowing of grass in green recreational areas and verges (we will still allow grass to grow in areas allocated to support wildflowers and pollinating insects).
Continue to look after the social care needs of those vulnerable adults and children and to support the rising number of people facing homelessness due to the cost-of-living crisis.
Investing in Plymouth
Despite the challenges we face in balancing the books we remain ambitious for Plymouth and continue to invest in regenerating the city centre, better roads and sustainable transport, tackling climate change and helping improve health and wellbeing of residents.
This investment comes from the capital programme, which is funded by grants from Government and other organisations, income from sales of assets and borrowing.
While it continues to be reviewed and re-profiled in light of increasing inflation and interest rates, the programme for investing in Plymouth between 2023/24 to 2027/28 still stands at £556.7 million.
We will remain proactive at securing external grant funding wherever possible so we can continue to deliver significant, ambitious capital investment in the city.