New Council Budget Invests in Reading’s Recovery

  • Council unveils provisional three year budget to invest in Reading’s recovery
  • Savings need to be delivered, but frontline services will be protected
  • Leader calls on Government to support the town’s economic recovery

Reading Council Civic Offices

THE Council’s provisional budget invests in Reading’s recovery, while protecting public services from the worst impacts of the Covid 19 crisis.

As the pandemic continues to shift the landscape for local government finances everywhere, Reading Borough Council today set out its ambitious new three year strategy. Savings still need to be identified and delivered to close the budget gap, but frontline services will be protected. The Council’s investment in better services, modern new facilities and a cleaner and healthier environment will continue. These include:

  • £9 million on Reading’s biggest ever investment in resurfacing roads and pavements, which began this Autumn.
  • More than £40 million on modern and new leisure facilities, including the replacement of Rivermead Leisure Centre and a new community pool at Palmer Park
  • £1.5 million on the introduction of a new doorstep food waste collection service in Spring 2021 to drive up recycling rates
  • £7 million on energy saving measures in buildings and renewable energy infrastructure to reduce costs, generating income and contributing to the Council’s net zero carbon target in 2030
    £20 million on Green Park Station, opening in 2021, and £3.2 million for the refurbishment of Reading West Station
  • Over £30 million for estate regeneration and new affordable council homes, including accommodation for rough sleepers
  • A £43m investment in modern and fit for purpose sheltered housing for older people, and supported accommodation and day facilities for vulnerable adults
  • £9m on Hamilton School to provide accommodation for children with special educational needs and £4.5m on the conversion of The Avenue offices to provide additional SEN school places.

The Council has worked hard to successfully stabilise finances after a decade of reductions in funding and increased demand for services, but the impact of Covid has been felt by every Council. In Reading, additional costs include supporting local care homes and vulnerable adults, buying PPE (Personal Protective Equipment) and setting up and operating the One Reading Community Hub, which provided a lifeline for many vulnerable residents at the height of the crisis.

At the same time, some fundamental Council income streams stopped completely. Leisure centres and theatres closed for long periods, there have been major losses in car parking revenue and a fall in council tax and business rates income is a direct result of hardship on residents and local businesses caused by the pandemic.

While these short term costs will be largely offset by emergency Government funding, planning a three year budget is more difficult than ever. The long term impact of Covid on local authority finances, and the financial support by Government to absorb those additional pressures, is not yet known. The same applies to the long term impact of Brexit.  This is compounded by the Government offering local authorities a one year settlement for 2021/22, rather than the usual three years.

The provisional three year Medium Term Financial Strategy (MTFS) published today shows the Council expects to have to make £27.7 million in savings over period to 23/24 and £14.2 next year. Further income and savings need to be found over the coming weeks to close the remaining budget gap of around £5 million and deliver a balanced budget in February 2021, as every Council has to by law.

The draft budget proposes a range of savings, efficiencies and additional income across a variety of services in order to protect frontline services. Examples include savings generated through reduced waste tonnage and the introduction of the new food waste collection service to drive up recycling rates; procurement of a new Council IT contract; a more streamlined and efficient customer service model; increasing the use of assistive technology in adult social care; and extra income generated through on street pay and display and the Council’s Direct Services offer. These sit alongside a series of service reviews where efficiencies have been provisionally identified which require further investigation and staff consultation.

Councillor Jason Brock, Reading Borough Council Leader, said:

“In a tremendously tough year for everyone, Council services have been critical in the fight against the pandemic and staff have responded magnificently. And while we all hope for much better news next year, there is no doubt the impact is likely to be felt for years to come. It is now the Council’s job to do everything in its power to minimise the impact by investing in Reading’s recovery.

“The financial stability we worked tirelessly to achieve over recent years means we are in a position where savings still need to be delivered, but frontline services will be protected. Our ambitions for Reading remain. We intend to deliver on all of our flagship investments, including our biggest ever investment in road surfaces, two new swimming pools, the introduction of doorstep food waste collections and building desperately needed affordable Council homes.

“Our commitment to achieving a net zero carbon town by 2030 also remains. As well as increasing recycling rates through food waste collections, the budget proposals include major investments in energy efficient buildings and in renewable energy.

“There are major investments for the more vulnerable members of our society too, both young and old.  Purpose built schools will be constructed for children with special education needs and we will deliver new, modern, housing for older residents, giving them more choice to live independently with the support they need at hand. We are also making a major investment in how we interact with residents, cutting unnecessary delays and putting our customers at the heart of everything we do.”

Central Government has announced that Council Tax increases will be capped at 2% (without a referendum) and that the Adult Social Care Precept can be increased by up to 3%. Because councils are still waiting on details of the Government’s one year settlement figure, Reading’s draft budget can only be based on the latest information available today. That means the final proposed Council Tax level for 2021/22 is yet to be decided.

The provisional budget will now go to a meeting of Policy Committee on Monday December 14th ( where Councillors will be asked to approve a period of public consultation. The results then return to Policy Committee on February 15th next year when a final budget and associated Council Tax level for next year will be recommended to Full Council on February 23rd.

Referring to the longer term solutions needed to make local government sustainable, Cllr Brock added:

“Our budget includes £277 million of investment in Reading’s recovery. We now need Government to step up and support our economic recovery too.

“The longer term funding issues facing every single local authority have not changed this year. A sustainable solution for properly funding both Adult’s and Children’s Social Care is long overdue. The Fairer Funding Review, initially due for implementation this year, has been delayed. Reading remains a major economic player in the south east, but is it is essential that the Government make vital infrastructure funding and further business support money available to us to drive the economy as we come out of this crisis, which will benefit everyone in the town and the region.

“In Reading we have successfully made over £34 million of savings in the last three years. A Government-mandated trajectory of further cuts to council budgets on this scale is not tenable and will not deliver what residents want and need. The sustainable solution is not for the Government to place the burden on hard pressed residents by forcing councils to choose only Council Tax increases. The sustainable solution will be for Government to wake up and acknowledge that councils like Reading need a settlement that provides local autonomy, certainty and the ability to make financially robust plans for service delivery over a multi-year period. Anything short of this is an abdication of Government’s responsibility to its citizens.

“The Covid crisis has shown the essential role local government still plays in our society  It is now essential Government finally puts local government on a firm financial footing, as the consequences are likely to be felt for a number of years.”

Reading Borough Council’s investments are funded from the Council’s £277.6 million 2021/22 – 2023/24 Capital Programme, which includes the Housing Revenue Account (£100 million) and General Fund Capital Programme (£177 million). It is funded from a combination of successful bids for grants, cheaper borrowing available to councils, developer contributions, infrastructure funding and capital receipts, which are received when the Council sells a building it no longer needs. It is different from the money the Council uses to run services and cannot be used to pay for day to day services or to balance the Council’s revenue budget.

Notes to Editor:

The Council’s Medium Term Financial Strategy is also informed by the Council’s Vision: “to ensure that Reading realises its potential – and that everyone who lives and works in Reading can share in the benefits of its success” as well as its Corporate Plan priorities, which are:

  • Securing the economic success of Reading;
  • Improving access to decent housing to meet local needs;
  • Protecting and enhancing the life outcomes of vulnerable adults and children;
  • Keeping Reading’s environment clean, green and safe (which includes addressing the declared climate emergency);
  • Promoting great education, leisure and cultural opportunities for people in reading; and
  • Ensuring the Council is ‘fit for the future’.

Oscar Mortali

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