Tough decisions lie ahead for Erewash Borough Council as local authorities wrestle with huge budget shortfalls, a stark new report by its Director of Resources reveals.
The “significant financial challenges” loom amid an explosion in the cost of services the council must run. Leader of Erewash Borough Council, Councillor James Dawson, warned that the council is being forced to spend more on homelessness, supported accommodation and emptying bins while having ever less money in real terms. He accused the government of starving inflation-hit councils of cash as they grapple with the increasing pressure on their resources. Erewash has so far succeeded in remaining debt-free unlike many other local authorities. Fourteen UK councils having issued 114 notices meaning that their forecast income is insufficient to meet their forecast expenditure for the next year. But Cllr Dawson said the council faces a funding gap running into millions unless urgent action is taken. The Local Government Association estimates the national funding gap to be £4billion.
Erewash is already having to copy other councils by bringing in a modest charge for garden waste collections. Residents will have to pay up to £37 from April – although signing up early will reduce this to £20. Meanwhile council staffing levels have been reduced amid continuing efficiency drives. The Budget Strategy Report of the Director of Resources, which was presented to Council Executive in November, says these have impacted what the council is able to offer but delivered “significant savings”. Digital technology may help – if the council can afford it – but it is “unrealistic” to see such measures as the only solution.
The report says that for the council to meet its duty to deliver a balanced budget the authority will need to direct its resources “towards the highest priorities and away from lesser ones”. More council-owned land may have to be sold – on top of sites that are already being disposed of. This is to raise capital funds for things such as replacing ageing refuse trucks. There may be government help to ditch diesel vehicles for green alternatives, but this remains “uncertain”. The council’s long-term financial forecasts remain hamstrung by the government’s tactic of not revealing how much money local authorities will get beyond yearly settlements.
The report states: “It is imperative that we create a working environment where we can deliver the change necessary whilst delivering our usual work. Failure to do so could compromise what the council is trying to achieve.”
Erewash Borough Council’s Lead Member for Resources, Councillor Gordon Thomas, backed the report’s conclusion that the authority needs to be “prudent” while pursuing a “strategic approach to delivering financial sustainability”. Cllr Thomas pledged that local people in Erewash will have a say on how the borough responds to the cash squeeze. A consultation will be launched in January.
“Unless central government starts funding local councils properly again half are heading for bankruptcy. That is a warning issued by the chair of the Commons Levelling Up Select Committee after it launched an inquiry into local authority finances. Erewash Borough Council does not want to be one of those plunging into the red. We continue to be well-run and debt-free – and are working hard to close our budget gap by meeting the immediate challenges head-on. Looking ahead, and with prudent financial planning over the medium-term, the council is aiming for a brighter future.”
