County Council Must Find £20 million to Balance Next Year’s Budget

Published on: 16 Dec, 2021
Updated on: 16 Dec, 2021

By Julie Armstrong

Surrey residents could face a major hike in council tax as the county council seeks to plug a gap of almost £20 million to plug in its budget by next month. Any rises will come on top of increases to National Insurance payable by working families.

But proposed council tax increases have still to be ratified by full meetings of the relevant local authorities.

Last year the county council left 2.5 per cent of its adult social care precept unused, meaning it has the option to make use of that on top of another potential 2.99 per cent rise.

The county council’s draft budget for the next financial year, 2022/23, estimates a shortfall of £35.5m, with the largest shortfall of £26.2m in adult social care.

But the authority hopes to reduce the gap to £19.5 million based on an estimated £16 million settlement from central government – it could go up or down depending on what it actually gets, which it expects to find out this afternoon (December 16).

The government announced in the spending review in October that councils can increase council tax by just short of two per cent next year without holding a referendum, and also by another one per cent, ring-fenced for adult social care.

The current (2021/22) council tax rates with comparable rates for 2020/21. Only county council elements are shown (ASC = Adult Social Care) Source SCC website

Borough and District councils are also likely to be applying the maximum increases allowed. Guildford Borough Council is planning an increase of 1.94 per cent.

Cllr Fiona Davidson

Cllr Fiona Davidson (R4GV, Guildford South-East) said: “If two per cent were charged next year that would derive about £19 million and we’ve currently got a gap of about £19 million.”

Mark Hak-Sanders, Surrey council’s strategic finance business partner (corporate), said he expected the authority would have to rely more on council tax in the future.

He said: “From 2023/24 onwards there’s effectively a very high-level assumption that our central government support will disappear altogether over the course of the medium term.”

The number of funded older people receiving care in Surrey fell by six per cent (385 people) between March 2020-September 2021, which executive director for adult social care Simon White said was “unfortunately because of covid” at today’s adults and health select committee meeting.

But despite the reduced number of recipients, the cost of their care has risen by 12 per cent in this time, to nearly £30,000 per person.

Mr Hak Sanders said Surrey had increased its adult social care spending the least amount in the South East in the four years since 2017/18, by eight per cent compared to an average 14.5 per cent.

He committed to making no cuts to voluntary and community groups in adult social care, saying if it wasn’t for their support “we’d be completely overwhelmed”.

He said: “You won’t find a single savings proposal which is cutting support to the third sector, that is completely the opposite of what we want to do.”

Councillor Robert Evans (Lab, Stanwell & Stanwell Moor) questioned the need for more efficiencies. He said: “Overall we’re talking of cuts of £20 million but we’ve got £200 million reserves.

“In a climate of increased demand and exceptional circumstances with Covid, why are we still sitting on £200 million of reserves?”

Anna D’Alessandro, Surrey County Council’s finance director, corporate and commercial, said the reserves were needed to create resilience.

“We are a large council with big numbers attached to it so if something goes the wrong way it will have significant financial implications,” she said.

“Many councils have gone under as a result of the covid pandemic and because we had financial resilience built into the budget we have been able to weather the storm really well.”

The second-largest funding gap is £8.6 million, for the high needs block that funds special educational needs (SEN).

At the children, families, lifelong learning and culture select committee on Monday (December 13), Cllr Denise Turner-Stewart, cabinet member for lifelong learning, said the council hoped to bring the SEN budget into balance in the next five years, by investing in 1,600 maintained places in the county.

On average, an independent SEN placement costs £30,000 more, and the number used by Surrey children is “unusually high” said Rachael Wardell, executive director of children and families.

“The use of the non-maintained independent sector does make us an outlier,” she said.

“To hold them, appropriately, in maintained provision in Surrey will make a very big difference to our bottom line over time.”

Cllr Fiona White

Children’s services is also short of £2.2 million, and Cllr Fiona White (Lib Dem, Guildford West) suggested the council was spending too much on agency staff, which cost £23,000 more per member than permanent staff.

She asked if they could improve the offer to council employees to encourage them to stay.

“It’s also important because of the continuation in care, families dealing with the same person rather than very reluctantly tell their story to different people,” she said.

Ms Wardell said: “I completely agree continuity of worker is very important; there’s lots of research that shows it’s the relationship a worker makes with the family they’re supporting that makes the difference.”

She said Surrey County Council’s inadequate Ofsted rating could be a deterrent. “Social workers are increasingly likely to rule out working for a local authority with an inadequate judgement and that obviously plays out in some of our recruitment efforts,” she said.

“I think that when we have our Ofsted visit and when as I expect we have a better Ofsted rating as a result of that, that is also likely to lead to a greater level of attraction for social workers to Surrey.”