Mayor for Finance, Governance, and Performance
Like many organisations, Bristol City Council has a cost of operating crisis, which will affect our ability to carry out all the activities we want to and may affect our ability to provide the services we want.
Over the next five years we must find a mix of additional income and cost savings between £37.5 million and £87.6 million, which equates to 9% to 20% of the council’s core budget. As part of our consultation on the annual budget which launches tomorrow (Friday 11 November), we’ll set our proposals for reducing costs and generating further income that amount to £46 million over the coming five years. With still some way to go to balance the worst-case five-year budget gap, further difficult decisions may be required in February 2023 and beyond to bridge the estimated £41 million gap remaining.
We’re not alone. The Local Government Association have estimated £3.4 billion in additional costs for councils in 2023/24, rising to £4.5 billion in 2024/25. Nine in ten councils nationally expect budget shortfalls next year and we’re no different.
How did we get here? This is a crisis that’s been over a decade in the making, with many years of austerity slashing council funding, with government support failing to keep pace with increasing costs and demand. In February this year, the Department for Levelling Up, Housing and Communities approved its plans for funding local government for the following three years. It was a plan that meant councils would get an upfront amount of money to fund themselves for the period of the plan, based on the financial circumstances of the time. This was a plan that local government leaders agreed would result in real terms cuts for services and would result in financial difficulties for councils in years two and three.
Since the council passed its current budget and five-year outlook in March 2022, there have been significant changes on a national and global stage that are having a direct impact on the authority’s financial forecasts. Inflation in the UK has risen sharply in recent months, climbing above 10% in September this year, pushing up the price of goods, services and energy for everyone in the country. Global events, such as the invasion of Ukraine, are also having an effect on international markets which impact directly on the cost of living. These current issues add pressure onto a local government system that is already struggling under the pressure.
This consultation will set out the full scale of the challenge we face. It makes for uncomfortable reading in places but must be read by also recognising that our proposals are to ensure the budget is balanced and the finances exist to fund the vital work we’re doing. If we are to continue to meet our statutory obligations including providing housing, delivering care for the elderly and disabled, creating school places, and helping people through the cost-of-living crisis, we are going to have to be prepared to let go of some of the things we’ve fought hard to protect over the past six years.
Residents and businesses have the opportunity to share their view on this journey now and will also be asked for input during future consultations on some proposals that have yet to be fully worked up. I urge everyone to take part in this conversation to help inform our approach and the decision that needs to be taken in February next year.
Once live it will be available here: https://www.ask.bristol.gov.uk/budget-2023-24
