Tonight (27 November), Colchester City Council’s Cabinet will review updated budget monitoring and financial forecast reports, highlighting the ongoing financial challenges faced by the authority. Despite efforts to control spending and focus on key priorities, higher interest rates, and increased service demand, particularly for temporary accommodation, continue to pose significant financial pressures.
The recent Autumn Budget announcement introduces further pressures from increased national insurance contributions and higher living wage costs, adding to the council’s financial burden and necessitating further savings.
In May 2022, Colchester City Council began a significant financial recovery journey, led by a new political team and Chief Executive. The council inherited a challenging situation with reduced income, rising homelessness, increased demand for services, and inflation. The rise in energy costs alone added over £8 million to annual expenditures.
Like many councils, it has faced years of deep cuts in Government support, forcing difficult decisions to reduce services and investment. Despite these pressures, the council has maintained a strong track record in financial management, saving nearly £16 million since 2018 on an annual budget of £26 million. However, additional savings or extra income of over £6 million are needed by 2026 to ensure long-term sustainability.
Over the last year, the council has made significant strides in controlling spending and focusing on key priorities. Key actions include:
- Reviewing its owned companies to reduce risk and to focus on income generation and community-beneficial projects.
- Creating a three-year transformation plan ‘Fit for the Future’ to reduce costs or increase income by 25%.
- Modernising and investing in technology to improve efficiency and service to residents.
Although these efforts are delivering positive financial results and inflation has begun to recede, the council has very significant service delivery and financial challenges to resolve if it is to ensure long-term stability.
In December, Colchester City Council’s Residents’ Panel will hold a session on the Fit for the Future programme. This session will enable residents to continue to provide feedback directly to the Leader and the Chief Executive, ensuring community voices are heard in the ongoing transformation efforts.
Cllr David King, Leader of Colchester City Council, said: “We have made good progress with our transformation programme, to live within our means while delivering as effectively as we can. However, without a long-term financial settlement from the Government, it is unsustainable to expect us to continue doing more with less.
"The Chancellor’s Autumn Budget has included some welcome additional funding which will support essential services. However, this increase is for one year only is overshadowed by the 6.7% rise in the living wage and the 1.2% increase in employer national insurance contributions. These changes and increasing homeless and other demands will significantly impact our core staff budgets and add further strain.
“Encouraged by our initial transformation successes, we will work to weather this storm. But we need Government to play their full part if we are to secure the stability and deliver the essential services residents need. As well as support their housing and growth agenda.
Page last reviewed: 27 November 2024