Around £6.5million in cuts have already been identified for next financial year
By Local Democracy Reporter Josh Mellor

The estimated budget gap at Waltham Forest Council has grown by £4million since this year’s budget was agreed in March.

Speaking to the budget and performance scrutiny committee last night, council leader Grace Williams said that financial uncertainty this year seems “particularly marked”.

Growing pressure on the budget comes from a combination of challenges, including “huge uncertainty” about government funding, rising inflation and the high cost of social care.

A review of spending currently suggests the council’s budget gap will be as large as £14million by the start of next financial year.

Cllr Williams said: “At the same time as we are facing difficult choices, our residents are facing the greatest cost of living crisis we’ve ever seen.

“The uncertainty has many layers to it because for many years we’ve been waiting for funding reforms.

“The thing I want to stress is that, although it’s a difficult picture, the thing I have confidence in is that we will prioritise careful financial stewardship.”

A report prepared for the meeting states inflation has made council contracts, energy and salaries costlier than expected, with staff pay increasing by 6% instead of 3%.

The council hopes that the government will provide “some certainty” on energy costs in the mini-budget expected from new chancellor Kwasi Kwarteng on Friday.

Although the government increased funding to councils by 7% this year, no increases are planned for the next two financial years, despite growing inflation.

A legal requirement for the council to balance its budget means it must begin planning cuts, often referred to as “savings”, if it anticipates a shortfall in coming years.

According to the council’s director of financial services, Ursula Gamble, no cuts to services were “appropriate” for this year’s budget because of the “huge uncertainty” ahead.

To avoid making cuts this year, the council instead spent reserves, which currently total £70m. However, the council’s leading officers and finance team team have identified “savings” of £6.5m for next year.

The majority of these would be in the council’s ‘people directorate’, which includes social care, public health and education.

Council tax, which represents about half of the council’s £247m annual general fund budget, is assumed to increase by 3%, bringing the monthly cost to a band D property to £1,998.57.

If needed, the council may dip into its “uncommitted” reserves, which could be as low as £9m by March 2023 if they are not topped up.

Having a tighter budget is also likely to “delay” any housebuilding projects that the council has not already started.

More concrete estimates of next year’s finances will be published in papers for a cabinet meeting in October.

The exact funding the government will give the council next year is not due to be confirmed until December.

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