North Northamptonshire Council forced to make up £748,000 budget gap after lower than expected Government settlement

A Northamptonshire council will have to make up three-quarters of a million pounds in its draft budget after the government’s financial settlement was less than expected.

Cllr Lloyd Bunday, the executive member in charge of finances for North Northamptonshire Council (NNC), said that the settlement fell short of budget assumptions made before the announcement. Funding for the services grant was “significantly lower than expected”, leaving a gap of £785,000.

The government’s service grant funding was reduced by 84 per cent nationally from levels in 2022/23. Part of the shortfall for NNC is covered by a £37,000 increase in the social care grant, but the council has suggested using a ‘budget smoothing reserve’ to close the rest of the £748,000 gap.

Cllr Bunday said: “This council, like many others is facing financial pressures, risks and uncertainties. Demand-led services are the most volatile and indeed carry the highest risk.

“Tackling overspends and implementing change can take time and the position may get worse before it gets better. Once reserves are spent they are gone and so a strategy for replenishing any reserves that are to be used must be in place.”

As part of the draft budget, council tax across the county has also been proposed to be raised by 4.99 per cent, as well as a 7.7 per cent increase in council rents. This could mean a yearly council tax increase of £82.71 on a band D home, and an average increase of £7 a week across council properties if the budget remains unchanged.

The executive proposed a balanced budget of £371m for next year but is warning that it will have a funding gap of £36m in 2025/26 which will rise to £83.8m by 2028. The council says it has already identified £18.5m worth of savings and efficiencies ahead of next year.

NNC will invest an extra £53.4m this year into key services, most notably for child and adult social care. A £4.1m contingency budget has been set aside for unforeseen cost pressures throughout the year.

A total capital programme fund of £163.5m for 2024-28 was also agreed upon by the executive. Children’s services, highways and economic development projects have been chosen as key areas to focus funding.

The executive approved the use of the budget smoothing reserve to meet the shortfall. Budget proposals are now open to public feedback until midnight on January 26.

The final budget will be presented to full council for approval in February 2024.