Flintshire Council budget shortfall for next year rises to £24m

The predicted shortfall in Flintshire Council’s budget for next year has risen by almost another £8m.

As recently as July the gap in the authority’s budget was expected to be £16.5m, but in a report due in front of Flintshire Council’s cabinet next week, that figure is currently expected to be £24.348m.

The impact of pay awards and increase in the cost of utilities such as gas and electricity amid rising inflation have been given as reasons for the revised figure.

A report to be presented to the Cabinet, produced by the Council’s Corporate Finance Manager Gary Ferguson, and Chief Executive Neal Cockerton, outlines the difficulties the authority is facing as it seeks to set a legal and balanced budget in February.

The report states: “Market volatility is continuing and forecasting likely increases in this market is extremely challenging. This has had a significant impact on UK energy prices causing steep cost rises across the wholesale utility markets.

“The revised forecast has been calculated with information from our energy suppliers on a range of scenarios taking account of new contracts to be purchased for both electricity and gas.

“As current markets are likely to remain volatile it is difficult to include any longer term forecasts beyond 2023/24.

“The revised forecast includes an increase of 75 per cent for electricity and an increase of 291 per cent on gas. The impact of these increases is affected by the current amount of energy already purchased by our suppliers.

“These inflationary impacts have increased the additional budget requirement by £1.050m for 2023/24.

“The impact of pay and utilities, together with other changes to existing cost pressures and some new emerging pressures across portfolios, have increased the additional budget requirement to £24.348m.”

Risks cited in the report which could push the shortfall even higher are potential pay awards for teachers and NJC members increasing, the effect of rising inflation on external partners, and social care costs.

As the Council looks to plug the shortfall, it is hoping for more support from the Welsh Government, which has previously given an indication that the 2023/24 local government settlement for Flintshire will be 3.5 per cent, and 2.4 per cent the year after.

In the report, Mr Ferguson and Mr Cockerton warn: “Without a supplementary increase to our allocation the Council will have a serious and significant challenge to be able to meet its statutory responsibility of setting a legal and balanced budget for 2023/24 and future years.”

The report will be discussed by Flintshire Council’s Cabinet on Monday (September 26).

Rory Sheehan – Local Democracy Reporter (more here).