Plymouth City Council has nearly halved a projected £4.7 million gap in its budget for next year.
The gap in funding to deliver more than 300 local services in 2018/19 has been reduced to £2.6 million over the last few months after services identified further savings and efficiencies and new income.
Work is still ongoing to close the gap in order to set a final 2018/19 revenue budget of £186.7 next month.
The gap is due to increasing costs and pressures in some services, including £3.2 million in children’s social care due to the rising demands for supporting vulnerable children.
Demand and costs are also rising in adult social care as the population gets older, meaning an additional £3 million is needed to fund care packages for vulnerable adults in Plymouth.
The national living wage now needs to be factored in all adult social care contracts, which will cost the Council an additional £2 million.
And while the Council has been successful in reducing spending, there are also challenges in meeting some previous budget saving targets in full, including all the projected savings from modernising its fleet and waste services and from a Smart Working project.
The recent two per cent national pay offer for local government has also added an additional £1 million pressure to the Council’s revenue budget.
The latest budget position, which will be considered by the Council’s Cabinet on 16 January, reflects the announcements in the Chancellor’s Autumn Statement and the Provisional Local Government Finance Settlement.
This includes the news that the Devon Business Rates Pool has become a pilot for keeping 100 per cent of growth in business rates, which could provide a further £1 million income.
A report to the Cabinet says the Government has allowed councils to levy a precept on the council tax of up to three per cent to pay for pressures in funding in adult social care.
This could potentially raise £3 million to support adult social care, which is the largest area of the Council’s spending at £76 million a year.
The report says a budget engagement exercise carried out by the Council in the autumn showed that more than half of respondents were supportive of a three per cent adult social care precept if the money raised is spent on services.
The Council will be continuing to work over the coming weeks to reduce the gap and Cabinet will be considering a draft budget in early February. A final budget and Council Tax levels are due to be agreed at Full Council on 26 February.
Councillor Ian Darcy, Cabinet member for Finance, said: “The challenges we face in closing the gap between the resources we have and the rising demand for services we provide, gets more and more difficult every year. The pressures on social care services are greater than ever and the figures are very big, so identifying the best solutions to deal with the funding gap without impacting on vital services is not easy.
“We have been successful to date in addressing these pressures by taking an innovative approach to how we deliver services with our partners and we are continuing to look long and hard at absolutely everything we do and spend to see where we might do things differently. We need to ensure new plans to reduce costs and spending are challenging but also achievable. We will be continuing to work hard to reduce the remaining gap right up to our budget setting meeting next month.”