‘Difficult decisions’ may be needed as council looks to balance books in face of £118m funding gap
- Credit: Norfolk County Council/Neil Perry
“Difficult decisions” could have to be taken if Norfolk County Council is to balance its books - because of a £20m shortfall between the estimated £63m cost of coronavirus and government funding to cover it.
As the council begins budget planning for next year, County Hall faces a projected £118m funding gap up to 2024/25, even with planned savings of £64m.
Andrew Jamieson, cabinet member for finance, said, without more help and certainty over funding in the longer-term, the council faced a “major challenge” and services could have to be changed or cut.
Responding to coronavirus has meant extra costs, less income and curtailed savings.
But he insisted the council was not “remotely close” to issuing a section 114 notice - which happens when councils run out of money, restricting spending.
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Some councils, including Luton and Lincoln, have signalled they may have to issue such notices in the wake of coronavirus.
Mr Jamieson said the council had already predicted a £38.9m gap next year, on top of £21m of savings, but the Covid-19 response will increase the pressure. He hopes the government will add to the £43m given so far.
Mr Jamieson said: “We’re doing everything we can to support people during the pandemic, but there is no doubt this will increase pressure on next year’s budget.
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“I’m encouraged by what ministers have said about further support for councils and a desire to resolve the future of adult social care. This needs to happen, or we will face difficult decisions to balance the books.”
Mr Jamieson said the way the council had responded to coronavirus had shown new ways of working, which could make savings and allow the sale of buildings.
He said changes which would otherwise have taken five years had happened virtually overnight, but warned the long-term pressures were “significant numbers”.
He said: “In the longer term, I do not believe the council will be able to resolve that without a total reformation in the way local councils are funded and run.
“Will we go bust? There are councils which are already having to consider issuing section 114 notices, particularly smaller, unitary authorities. But we are not remotely in that place at this time.”
But Steve Morphew, leader of the opposition Labour group, said: “Norfolk obviously can’t manage this scale of cuts.
“Ten years of austerity left services vulnerable and Covid has reminded us of the crucial value of public services. “The county council has been weak in speaking up for Norfolk to government. Feeble hand-wringing makes us look like a soft touch so we regularly lose out or get less government cash than other areas.
“Right now we need strong leadership from the Conservative administration and support from local MPs or our needs will be drowned out yet again. I’m not confident that’s what we’ll get.”
And Liberal Democrat group leader Steffan Aquarone said the reports, which will go before the council’s cabinet next month, raised more questions than answers.
He said: “Despite the government already providing £43m based on its assessment of how much it though the council needed to help with the coronavirus response, the council has an estimated hole in the budget of over £63m.
“The big question is how this will impact on next year’s budget, council tax and planned delivery of services. This uncertainty is damaging to Norfolk.”
These are the planned £64m savings for some of the key department at Norfolk County Council from 2020/21 to 2023/24
Adult social services 2020/21: £22.8m 2021/22: £7.3m 2022/23: £0.2m 2023/24 £0m Total: £30.5m (48pc of total savings)
Children’s services 2020/21: £9.2m 2021/22: £6.4m 2022/23: £2m 2023/24: £0m Total: £17.7m (28pc of total savings)
Community and environmental services: 2020/21: £5m 2021/22: £2.7m 2023/23: +£1.3m 2023/24: £0m Total: £6.5m (10pc of total savings)
Business transformation: 2020/21: £0.7m 2021/22: £4.4m 2022/23: £1.4m 2023/24: £0.4m Total: £7m (11pc of total savings)