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Council approves new financial sustainability strategy

Date Published: 18 November 2022
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Rutland County Council has approved a new financial sustainability strategy in response to severe and growing pressure on its budgets.

The Council must set a balanced budget each year and currently predicts it will face a funding gap of around £2.8m by 2023/24 – dependent upon the Local Government Finance Settlement due in December 2022. This is being driven by inflation, which is putting huge pressure on the local government sector because existing funding sources cannot keep pace with the rising cost of goods and services. Rutland County Council can use non-ringfenced reserve funding to bridge this gap in the short term. However, if no action is taken to reduce costs, the gap will grow and the Council will exhaust its reserves by the end of 2026/27.

To place the authority on a more secure footing in the face of increasing financial uncertainty, Rutland County Councillors have approved plans to use Council Tax, cost reductions and non-ringfenced reserves (the Council’s savings) to balance its annual budget in each of the next four years, while it works towards a ‘break even’ budget in 2027/28. This means the Council aims to set a 2027/28 budget with no reliance on reserves for its expenditure thereafter.

Councillor Karen Payne, Cabinet Member for Finance at Rutland County Council, explained: 

“Many Councils, including our own, are now entering unchartered territory. Faced with soaring inflation and very little certainty about future government funding, our officers have been reviewing budgets to identify where further efficiencies can be made. Even if Members pursued all the savings generated by this review, it would not be enough to close our financial gap. The scale of the task now facing local councils is such that even a substantial increase in Government funding – which is unlikely – will not solve this issue. Fundamental change is needed.”
Councillors met to discuss the Financial Sustainability Strategy on Monday 7 November and voted to approve the new approach to closing Rutland County Council’s financial gap.

Cllr Lucy Stephenson, Leader of Rutland County Council, said: 

“We are already a very efficient Council and have been praised by the Local Government Association for the quality of our financial management. Having made savings of almost £12.5million in the 10 years between 2011 and 2021, there are very few savings left to deliver that would not have a big impact on the services we offer. Across the Council, we need to fundamentally change what we deliver for our total service offer to be made affordable in the long term. 

“Although the situation is extremely serious, we can take a considered approach to balancing our books over the next several years. We don’t want an emergency response that simply slashes away at budgets to close our funding gap. This would cause serious harm to our residents. We have sufficient reserves to manage this crisis carefully – unlike many other councils who are now perilously close to a financial cliff edge. We can afford to take time to reorganise and develop a sustainable service offer – helping us to spend less money but also spend differently, so we can keep working for communities and particularly those most in need.”

Rutland County Council will set its next annual budget for the year 2023/24 in February, where it will outline proposals for further savings of £800,000. 

The Financial Sustainability Strategy presented to Full Council on Monday 7 November 2022 (Report No. 158/2022) can be read in full by going to our Meetings page.

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