More cuts on horizon admits Lancaster City Council

Lancaster general view'Lancaster Town Hall.
Lancaster general view'Lancaster Town Hall.

Substantially more budget cuts, income generation and “other savings” are still needed to balance the books, the chief executive of Lancaster City Council has said.

The council has just released its Statement of Accounts for 2016/17, set against a background of “continuing significant financial challenges”, due to central government funding reductions, cost pressures within services and continued volatility in respect of business rates income.

The statement said this position is likely to continue until at least 2020/21, in particular in respect of government funding, which will see Revenue Support Grant dropping from £2.652m in 2016/17 to nil by 2020/21.

Whilst the Council has a balanced budget for 2017/18 without drawing on Balances, the prospects for the following three years (2018-2021) are not as healthy.

The council’s General Fund budget for 2016/17 – income and expenditure associated with the day to day running of all the services that the Council provides, with the exception of council housing – was originally approved in March 2016 at £16.803m.

Between 2015/16 and 2016/17 the General Fund budget reduced by £794,000 or five per cent, primarily as a result of government funding reductions.

The council recorded a net underspending on its Housing Revenue Account for 2016/17 of £112,000 (£348,000 in 2015/16), with unallocated balances now standing at £1.937m (£1.437m above the recently updated £500,000 minimum recommended level).

Susan Parsonage, Lancaster City Council’s chief executive, said: “Although the council’s General Fund budget and associated Government funding reduced again in 2016/17, it managed those reductions well and achieved a small underspend due to the prudent approach it continues to pursue.

“However, given likely funding prospects, the council must continue to reduce its costs and increase income wherever possible - substantially more efficiencies, income generation and other savings are still needed.

“By 2020/21 the council will need to have identified savings of just over £2.1m and a 
range of options is being developed to meet these requirements.

“Although more work is still needed, the emphasis will be placed on taking a creative, efficient and pro-active 
approach to serving the district.”

A spokesman for the city council said that it is too early to say what form “efficiencies and savings” might take, and that proposals for next year’s budget would become available in the autumn/winter of this year.