Stafford Borough Council facing 'best-case scenario' of £1m funding gap

After a reduction in funding from central government, council members have been told that while the authority can expect a surplus in funds in 2020/21 a deficit is forecast for the coming years.

The council’s financial plan covering the years from 2029-20 to 2022-23 was considered by the cabinet on November 7 and the resources scrutiny committee on November 18.

Councillor Mike Smith, cabinet member for resources, said: “As we said last year there is a great amount of uncertainty.

“In the best case scenario in 2023/24 we will have a deficit of £1m. In the worst case we will have a deficit of £3.2m.

“We don’t know what the Government intends to do going forward with the New Homes Bonus. The initial information we have got is it will only be for one year and that is bad news all round.”

Councillor Jeremy Pert, cabinet member for community and health, added: “What this report demonstrates to me is Stafford Borough Council is a prudent well-run council tackling the issues that are there in terms of central funding, upfront and in a prudent practical way.

“As long as I have been on the council we have seen reduction in the Revenue Support Grant (from central Government) morphing into funding through New Homes Bonus and we can see that moving further from there. The Business Rate retention we did this year has been part of that.

“But I think this charts very clearly the challenges the council faces and demonstrates the tough environment we’re in. But we haven’t had to take knee jerk reactions to manage the environment we’re in and that provides confidence in the way this council is run and managed.”

Council leader Patrick Farrington spoke of “increasing pressures” and uncertainty around the future of funding for the authority.

He said: “As a consequence of the proposed local government settlement for 2020/21 and the uncertainty around the issues that have been raised I have written to Robert Jenrick, the Secretary of State for Communities and Local Government. I have written to our local MPs and I have seen that has been copied to the Chancellor.

“It has been formally recognised in a peer review that we are a prudent authority. We have to analyse what may be happening in future years, measured against all the uncertainty, and sometimes we have to take decisions and options that perhaps in a better funded world we might not have to do.”

But Councillor Aidan Godfrey, the authority’s opposition leader, said that if council tax had been managed in a “better way” the future financial prospects may not have been so bad.

The borough authority’s decisions to freeze council tax in previous years – and decrease it by two per cent during 2014-15 – have previously come in for criticism from Councillor Godfrey, who said it should have been increased “little and often”

Speaking at the Resources Scrutiny Committee he said: “It might not have been a deficit – it might even have been in balance. But we are where we are and we have to support officers to get the solutions.”