DORSET Council’s budget proposals for financial year 2021-22 will go to Cabinet next week for approval.
The council is proposing to increase its budget for financial year 2021-22 to just under £313million, from £304million the year before.
This budget funds all services the council provides to residents, communities and businesses throughout the year. The increase is needed to fund the cost of responding to the coronavirus pandemic, the growing need for social care within the Dorset population, and inflation.
The council proposes to increase general council tax next year by just under 2% and to levy the adult social care precept of just under 3% – in line with the government’s Spending Review. This would equate to £1.62 extra a week for a Band D property.
The budget proposals for 2021-22 also include an assumption of a 0% pay award for council staff. The Chancellor’s Spending Review last year announced that public sector pay would be “paused”.
While central government has no formal role in deciding local government pay, which is negotiated nationally by employers with trade unions, it is likely that local government pay will follow suit.
The council also proposes a number of tactical and transformational savings which aim to improve efficiency and protect frontline services.
Dorset Council is required by law to set a balanced budget – in other words, expenditure must be balanced by income. This year’s budget-setting exercise takes place against a continuing national background of extreme financial pressure for councils resulting from the coronavirus pandemic.
The council’s COVID-19 response has resulted in additional expenditure for things like support for vulnerable residents, PPE, COVID-secure arrangements, and lost income for things like car parking, leisure services, business rates and council tax.
Following extensive lobbying by Dorset councillors and MPs, the government has provided significant funding for these additional costs and loss of income, though not enough to cover the full impact.
There is a high level of uncertainty about future cost pressures, due to the ongoing coronavirus pandemic, and also uncertainty resulting from the UK’s exit from the EU.
Like most councils across the country, Dorset Council also faces significant budget pressures from the growing need for social care, with an ageing population.
These budget proposals for 2021-22 were discussed at two council Scrutiny committees in December. Following consideration at Cabinet, the budget proposals will go to the full council meeting in February for final approval by all Dorset councillors.
Cllr Gary Suttle, portfolio holder for Finance, Commercial and Capital Strategy, said: “It has been particularly challenging developing the budget for next financial year, 2021-22, due to the high level of uncertainty caused by the COVID pandemic.
“COVID has had a massive impact on our communities and our budget this year and this is likely to continue over the coming months.
“We have developed proposals which will deliver a balanced budget. But it has not been easy and it is with a heavy heart that we have had to include proposals for a council tax increase.
“We understand that many residents and local businesses have been hit financially by the pandemic, and there will be support available for the hardest hit.
“The budget assumption of a pay freeze for staff is also made with a heavy heart when we are keenly aware how hard staff have worked for many months.
“These are tough choices, but we have to find ways to fund the support for communities through the pandemic and the ever-growing need among our residents for social care services.
“We continue to lobby the government for further funding. And we will endeavour to protect the vital council services on which so many residents rely.”
The agenda and papers, and a link to watch the committee online, are published on the council’s website by clicking here.
Quarter 3 financial management report for 2020-21
The Cabinet meeting on January 19 will also consider the Quarter 3 financial management report for the current financial year, 2020-21. This estimates the overspend at the end of the financial year at £18.6million.
This will be covered from the council’s reserves. The overspend has largely resulted from additional expenditure and loss of income caused by the coronavirus pandemic.
In Quarter 1, Dorset Council was forecasting an overspend of £43million for the financial year. The council has managed to reduce this financial impact over the course of the year by accelerating some savings programme, restricting some recruitment, increasing income over the summer when COVID restrictions were relaxed, and lobbying Government and securing more funding.