The large and unforeseen rise in inflation has prompted Waverley Borough Council to update its General Fund financial projections for the current financial year. The Council’s General Fund pays for all of its services, with the exception of housing, which has a ringfenced budget. The General Fund budget is financed mainly from Council Tax, Business Rates and income from operating the council’s assets, such as car parks and leisure centres.
The 2022/23 budget, which was approved in February this year, estimated that inflation would add £0.9m to costs this year, but revised assessments now put this figure at over £1.4m. Even after allowing for increases in income and other identified cost-saving measures, the council forecasts its unfunded budget deficit will nearly double to £1.5m by 2025/26.
The full update report was published ahead of the Council’s Overview and Scrutiny – Resources Committee Meeting on Monday 7 November.
Councillor Mark Merryweather, Waverley Borough Council Portfolio Holder for Finance, Assets & Commercial Services, said:
“Even before Covid-19 and the current cost of living crisis, we were under tremendous financial pressure due to repeated cuts by central Government, to our grants and our share of Business Rates income.
“Inflation is incredibly difficult to deal with, because we have limited ability to increase our income, so we either have to cut services or pass the cost increases on to our residents – who are themselves being squeezed on all sides. Inflation also affects our ability to invest in local infrastructure when even projects with secured funding can’t keep up with rising contractor and materials costs. To some extent we do benefit from some cash balances we are required to hold, which generate interest to offset some of the inflation, but that’s small comfort in such uncertain times.
“We are determined to do what we can address the short-term challenges and to plan a financially secure future for our services, but after 12 years of heavy cuts to our funding, what all councils really need, is a long-term funding solution from central Government that puts local authority finances back on a sustainable footing.”