Plymouth City Council is having to manage big reductions in its funding and further rises in the cost of providing social care services as it tries to balance its budget for 2018/19.
A report to the Cabinet on 13 February says the Council has seen a huge reduction in its revenue support grant in recent years as the Government moves towards a model of funding local services almost entirely through business rates and council tax.
Plymouth’s revenue support grant from the Government has fallen from £76.6 million in 2013/14 to a projected figure of £5.6 million in 2020/21.
There will be no revenue support grant at all for 2018/19 as Plymouth is part of the Devon business rates pool, which has been selected to pilot a Government scheme for its proposed move towards councils retaining 100 per cent of business rates collected instead of receiving grants.
This will mean that for the first time ever next year the main funding source to enable Plymouth City Council to run hundreds of local services will be business rates and council tax.
The Government has assumed Plymouth will generate an extra £7.5 million in council tax next year and that it will help fund the increasing costs of adult social care, which is being experienced across the country, by levying a three per cent ‘precept’ on the Council Tax specifically for care services.
The report says the Council has previously highlighted the need for funding of adult social care to be addressed. The costs of providing adult social care services have risen by a further £4.8 million for next year and will continue to rise in future years due to the rising age of the population and the need to pay care staff the National Living Wage.
A three per cent council tax precept to pay for adult social care would raise just over £3 million towards this gap in funding services for vulnerable adults needing care and support, leaving the Council to find other savings to cover the extra costs.
The Council is also having to fund an additional £3.2 million costs of providing care packages and support for vulnerable children.
The report says other challenges include a reduction of £405,000 in its public health grant and £129,000 in its funding to administer housing benefit.
The Council is having to save a total of £10.3 million to deliver a budget for 2018/19, which is equivalent to 5.6 per cent of its budget.
A final budget and council tax levels are due to be agreed at the full council meeting on 26 February.
Councillor Ian Darcy, Cabinet member for Finance, said: “We have been working hard to deal with these pressures on our budgets for a number of years and have been radical and innovative in our approach, not least by integrating our social care services with partners and changing the way we deliver many of services. This has delivered more than £80 million of savings.
“The job is getting harder and harder as funding reduces and costs continue to increase but we are being relentless in driving out more efficiencies in order to maintain services and keep council tax levels as low as possible. We will be working right up to the day we set the budget later this month to find savings and reduce costs so we have a balanced budget for next year that delivers good services for Plymouth residents.”