Financial accounting By Wrangler AdobeStock_58013103

An investigation by the BBC Shared Data Unit found that local authorities across the UK plan to make at least £1.7 billion worth of savings in the 2021-22 financial year. Over £21 million is to be saved between Bedford Borough Council and Central Bedfordshire Council.

The Shared Data Unit study focused on the annual budgets of 171 upper and single-tier councils in the UK ratified before the close of the 2021-22 financial year in March and February.

These budgets set out the financial challenges for the year ahead, while setting a council tax level and outlining any savings needed to keep a balanced budget.

When setting budgets for the 2021-22 financial year, councils with the responsibility for adult social care in England were given the ability to raise council tax by 4.99% in total (with 3% ring-fenced for use in adult social care departments).

It had previously been capped at 3.99%, and any proposed rises above 4.99% would require a referendum. The increase recorded by the Shared Data Unit was 3.74% for Bedford Borough Council and 4.95% for Central Bedfordshire.

Facilities such as council-owned leisure centres and museums were closed for the majority of the 2020/21 financial year, while town centre parking revenue virtually ceased.

Businesses and investments, which would normally produce income for authorities also closed – such as partially council-owned airports in Manchester, Birmingham and Luton.

Costs associated with coronavirus, such as the procurement of Personal Protective Equipment (PPE) for social workers and essential council staff, soared as cases rose, while income from business rates and council tax were also hit.

Bedford Borough and Central Bedfordshire Councils were asked about their savings, lost income, PPE and their investments as they look to balance their books. 

Central Bedfordshire Council

When asked about Central Bedfordshire Council’s (CBC) financial pressures during 2020/21 and 2021/22, a spokesperson said:

“Local government finances are always under pressure. The enduring COVID-19 pandemic gives added uncertainty at the present time. Main pressures we have budgeted for are around the cost of social care and children’s services.”

“Improved financial support would of course be welcome, but Government has provided significant additional funding during the past 12 months.

“Whether more is needed for COVID-19 responses will depend on how long and how severe the crisis is. Adult social care is underfunded and we would welcome permanent support for that. Ad hoc measures make planning for the future much harder.”

They added that CBC has planned to make ‘efficiencies’ of £10.735M (£37.19 per person). It has no budgeted cuts planned as a result of the pandemic and that it does not plan to use reserves in response to the pandemic.

“Some reserves will be used for the purposes they were originally put aside for.”

With the lockdowns, CBC lost income from its leisure centres and other public facilities, its spokesperson said that this lost income will be replaced by a compensation scheme. It has not yet received the full funding from this due to a timing issue with the Government claims system. Government funding also covered the costs of the procurement of PPE for social workers and essential council staff.

Councils, over the last decade have been encouraged by the government to enter into private ventures.

CBC said that it has set up two wholly owned companies, one for housing development (New Visita Homes )and one for social care (Care is Central).

In July last year, the then Ministry of Housing, Communities & Local Government (MHCLG) secretary Robert Jenrick said the government would have limited sympathy for councils whose financial predicament had been caused by “risky” investments.

CBC said:

“The companies are in the very early days of operations, so no significant risk has arisen as yet.

“The Council has put in place a comprehensive system of governance to ensure that the companies are well run and all activities are reported back to the Council.”

Bedford Borough Council

Cllr Michael Headley, portfolio holder for finance at Bedford Borough Council, said:

“This last year has seen some of the most challenging times for our Council, with the pressure that COVID-19 has placed on our services while simultaneously making it even more important that the Council is here to provide vital support for people who need it.

“We are now faced with making over £10million of savings in just one financial year. Our Budget sets out how we plan to do that, by becoming more efficient and making savings where we can, while continuing to protect much-needed services for local people. We are also continuing to invest in the future of our Borough, with new school classrooms, improvements to our roads and pavements and continued support for the town centre.”

The Borough Council’s next Spending Review will commence later this year. A spokesperson for the Council said funding for Local Government has fallen significantly in the last decade, alongside which local authorities have had to deal with growing demand for key services such as adults and children’s social care and homelessness.

Adding that Local Authorities require certainty in their funding to maintain key services and plan strategically for the future. A long-term solution to the funding of adult social care is key to the Council’s financial sustainability going forward. We continue to put forward representations for improved financial support from Central Government.

The Borough Council’s gross savings target in 2021/2022 is £10.9m (£62.90 per person). The spokesperson said the savings were planned before the pandemic and are required due to the reductions in Local Government funding from the government over recent years, and increased need for services.

The majority of the savings that were planned for 2020/21 were delayed to 2021/22, as management resources were redirected to support the COVID-19 response. Transformational activities to facilitate savings restarted in late 2020/21. The Council said that it will not be using reserves to balance the books.

Leisure centres in the Borough are outsourced, therefore lost income from sales is a matter for the leisure provider, and not the Council.

The Borough Council spokesperson said with regards to PPE, not all the funding was ring-fenced so it is not possible to specify what the funding source was. Adding that in 2020/21, the council spent £1.4m more on the pandemic than it received in COVID-19 grants.

Bedford Borough Council has an existing commercial property portfolio that supports the Council’s service provision and promotes economic development. The Council has not invested in property outside of the borough boundaries. The spokesperson said the government has rightly discouraged purely speculative commercial investments because of the risk of failure to the Council Tax payer:

“Due diligence is done on all potential investments to help ensure that they are sound and stable before any commitment is made by Bedford Borough Council.”