Chelmsford City Council considers proposals to tackle budget shortfall

Chelmsford City Council is considering proposals to tackle the burden of soaring inflation and volatile economic conditions on its finances. Next week’s Full Council will vote on proposals to increase some fees and charges as part of a range of measures to close its budget gap, which was forecast in October to be around £7.9m for 2023/24.

The shortfall is due in large part to record inflation, with extra costs for energy a particular problem. Current projections suggest the council will need to spend £48,000 more a week on energy costs across its services (£2.5m in total), a large proportion of which is heating for the council’s swimming pools and leisure centres.

A recent finance report also identified a big drop in car parking income following changes to working patterns after the pandemic. In 2022-23 this is forecast to bring in £25,000 a week less than predicted (£1.3m in total).

Stark choices for local authorities

Chelmsford City Council is not alone in facing tough choices about how to balance its books. Local authorities everywhere are under unprecedented strain, with a growing funding crisis affecting local government in every part of the UK. Earlier this month, two large county councils warned that they were sleepwalking ‘into financial disaster’ and could be forced into bankruptcy without emergency help.

In late December, councils discover exactly how much funding they’ll get from central government for the coming year, but the Autumn Statement did not imply that any additional funding would be available for district councils, leaving a difficult dilemma about how to keep services going.

Extra 1% council tax increase permitted

The Chancellor has announced that the government will allow district councils in England to increase council tax by 3% a year in April 2023, up from 2% (or £5 a year). This additional increase would bring in just £1,700 a week (£90,000 a year) for Chelmsford City Council.

Although the City Council collects all the council tax in its area, it only keeps around 11% of residents’ monthly payments. Since this source of revenue accounts for less than a quarter of the council’s income, Leader Cllr Stephen Robinson says this small measure will make little difference to its finances.

“

"With energy costs up by £48,000 a week and car park income down by £25,000 a week, an extra £1,700 a week from council tax still leaves us with a shortfall of £71,300 a week on just these two aspects of our budget and will make very little difference to the overall projected budget deficit of £7.9m. So we must look at other sources of new income.

With eye-watering energy costs and inflation at a 41-year high, all councils are facing a squeeze never experienced before. On 17 November, the Chancellor’s statement made clear how tough things will be for the next few years. It will be two or three weeks before we find out the precise details of our funding settlement from the Government, but the signs don’t look promising. So we must act now.

We make efficiencies where we can every year, but the scale of the current challenge means that this couldn’t even come close to being enough. Without extra funding, we are left with little choice but to raise the charges as proposed."

Cllr Stephen Robinson, Leader, Chelmsford City Council

Proposals suggest use of some emergency reserves

The proposals being considered on 7 December suggest that a range of other measures are necessary to balance the books. A finance report published today, which will be examined by councillors, identifies that without additional government help it is inevitable that the council will have to spend some of its emergency “rainy-day” reserves to get by next year.

However, the report warns that the council will need to maintain a robust reserve to manage future risks and that action to keep this fund from falling any further is advisable.

Increase in some fees and charges suggested

The council usually seeks to increase its budgets for fees and charges by 2% a year, in line with the Bank of England’s inflation target. However, this July it approved a target of a 4% increase in 2023/24 to recognise the higher costs it was facing. Since then, inflation and costs have risen, so the report recommends that the council increases charges by more than 4% in some areas from January.

Leisure services

The council’s four leisure centres which are home to three swimming pools and an ice rink have been hit hard by energy hikes and other cost pressures. Based on current projections, the centres are predicted to cost an extra £36,000 a week in 2023/24. From January, it’s proposed that charges will be increased for pay-as-you-go activities, swim school subscriptions and ice rink charges. Although many sessions will rise in price, most won’t go up as much as inflation and will remain good value compared to other similar facilities. Monthly memberships will not increase in January and will be reviewed as usual, for implementation in April.

Long-stay, season tickets and overnight parking

Shoppers would be protected, as short-stay parking charges aren’t proposed to go up in the council’s car parks from January 1, but the full-day charge at all long-stay car parks would go up by 50p. The council’s Coval Lane car park, which is a short walk to the city’s train and bus stations, would also move into a higher banding, increasing the full-day charge there to £9.50. Evening charges would also be increased by 20p across all car parks and season ticket charges would go up by £50.

Specialist and bulky waste collections

The council’s waste service is another area where price increases have been most acute, with fuel costing much more than before. The council currently provides a specialist paid-for service for the collection and disposal of household items that can’t be placed in or are too large for kerbside general waste collections: mainly electrical goods and furniture, such as cookers, washing machines and sofas. The proposals will suggest that it will in future cost £20 for the first item and £40 for 3 items to be collected, up from £16 and £33 respectively.

Cremation and burial fees

Costs have also increased at Chelmsford Crematorium over the last year, although its cremation fees have remained lower than the regional group average. It is proposed to increase crematorium charges in line both with inflation and the group average rate to £1,050, from January. Exclusive right of burial grave purchases, which are currently 32% below the Essex average would also increase to £1,590. Resident charges for interment of over-18s would also go up in line with the Essex sector average to £981.

Planning Advice Service

Chelmsford City Council, along with many other councils, offers a pre-application planning advice service which allows applicants to share their proposals informally for comments and advice prior to submitting a formal planning application. The report will recommend that charges for these services should be recalibrated to more accurately reflect the cost of providing them.

Although a price rise of more than 2% would be unthinkable most years, Cllr Robinson says the council now has little choice but to pass on some of the increased costs of running its services.

“

"In some areas, such as our leisure centres and our waste collections, costs have increased so much over the last few months that we simply cannot soak this up any longer. All of our services, whether they are delivered to residents without charge, or a paid service like our leisure centres, are crucial to the functioning and wellbeing of our city. We’ll do everything we can to ensure that these are priced in line with other, similar facilities elsewhere, however, we have little option but to ask users of these paid services to take on some of the extra costs of keeping them going.

The key thing for us in the coming months is to protect all the services we deliver because, much like our reserves, if they were to be cut, they’d be incredibly difficult to get back. We are an authority with a good track record of financial management and lucky to be in a better position than others who may have to make swingeing cuts. But make no mistake, funding crises are causing an existential crisis for councils across the country, and we are no different. We will do whatever we can to ensure that any price rises are fair."

Cllr Stephen Robinson, Leader, Chelmsford City Council

Savings and efficiencies to be found

Over the last few weeks, officers have been reviewing all the council’s spending and will continue to do this over the coming year. The report suggests that savings and efficiencies identified as part of budget planning for 2023/24 should be implemented without delay and officers will be asked to defer expenditure wherever possible.

Council to vote on plans on 7 December

Chelmsford City Council’s main committee meetings are streamed live on our YouTube channel. If you’d like to watch Full Council on 7 December where these proposals and other important city matters will be discussed and voted on, tune in online from 7pm. Our meetings are also open to the public and you can attend in person if you wish.

You can view the meeting agenda, including a report about the council’s fees and charges.