Latest Savings Proposals Reduce the Budget Gap 

A NEW package of savings and income proposals will be considered on January 15th as Reading Borough Council continues to work towards setting a legal and balanced budget for next year.

No new funding has been provided by Central Government in 2018/19 to cope with the rising demand for both children’s and adult social care. The cost of caring and protecting the most vulnerable adults and children in Reading is expected to rise by more than £10 million next year alone. This is in addition to the pay award of 2.7% which, whilst agreed at a national level, comes with no funding from Government.

Local Authorities are being allowed to raise Council Tax by an additional 1% without a referendum. In Reading this raises less than £1m. The scale of demand for vital care services means the Council continues to face very difficult decisions in order to set a balanced budget, which it has to by law.

Government funding for Reading Borough Council will have been cut from nearly £58 million between 2010 and 2020, leaving the Council with a Government grant of under £2 million. That grant may be removed entirely by 2020 and there remains little clarity on how Government will fund local authorities beyond that point.

On Monday January 15th, a meeting of Reading Borough Council’s Policy Committee will consider a new package of savings and income proposals. Further savings proposals will be considered at Policy Committee in February, in advance of the Council setting its budget for 2018/19 on February 28th.

Reading Borough Council Leader Jo Lovelock said:

“Year upon year of underfunding of vital public services mean local councils continue to face increasingly unpalatable decisions in order to set a balanced budget which – unlike Central Government or NHS Trusts – we have to by law.

“Councils of every political persuasion have lobbied Government and its response has been to pass the buck and allow local authorities to increase Council Tax by an additional 1% next year.

“The harsh reality however, is that years of unprecedented funding cuts at a time of rising demand has left many Councils beyond the point where a Council Tax increase can plug the gap. It is no substitute for properly funded public services.

“This Council has a very strong track record of maintaining front line services wherever possible, ‎to ensure vulnerable children, families and older people are protected, and to maintain services that all residents need, such as bin collections and street lighting.  We are under no illusions however, that we face more very difficult decisions over the next two months to balance the budget for next year.

“Whilst Berkshire has been included in the business rates pilot for 18/19, it is important to note this is for one year only. It is essential that the Government provide clarity as soon as possible on how it intends to fund local Councils beyond 2020. In the meantime, delays in implementing a properly thought out and sustainable funding model for Local Government mean vital public services will continue to struggle to meet demand.”

The January 15th Policy Committee report can be found at http://www.reading.gov.uk/media/8179/item11-MTFS/pdf/item11-MTFS.pdf . If agreed, consultation and community engagement will take place on individual savings proposals as appropriate.

The latest package follows on from savings agreed in July 2017,  93% of which are on target to be delivered. The Council’s Medium Term Financial Strategy however shows a predicted funding gap of £43.2 million over the period to 2020/21, if it continues to deliver public services as it currently does. Of this total, nearly half is made up of demand pressures, particularly in the area of adults and children’s social care.

Over the coming years the Council intends to continue to invest in growing the economy and increasing the supply of new homes. It also needs to implement new and different models of service delivery on a much bigger scale than before, in order to help protect priority services.

Notes To Editor:

The Local Government Association predict that by 2020, 60p in every £1 of Council Tax will be spent on the spiralling cost of children’s and adult social care.

Speaking following the announcement of the Local Government Finance Settlement just before Christmas, Lord Porter, Chairman of the Local Government Association, said: “Years of unprecedented central government funding cuts have left many councils beyond the point where council tax income can be expected to plug the growing funding gaps they face. Local government faces an overall funding gap of £5.8 billion by 2020. Children’s services, adult social care and homelessness services are at a tipping point as a result of funding gaps and rising demand and increasingly little is left to fund other services, like cleaning streets, running leisure centres and libraries, and fixing potholes. While some councils will receive extra funding next year, the Government needs to provide new funding for all councils over the next few years so they can protect vital local services from further cutbacks.”

The full Local Government Association response to the Local Government Finance Settlement for 2018/19 can be found at:

https://www.local.gov.uk/about/news/councils-responds-local-government-finance-settlement

Oscar Mortali

For media enquiries about this release email oscar.mortali@reading.gov.uk or call 0118 937 2301