Cabinet to consider 2023/24 budget proposals with green investment

Chelmsford City Council’s Cabinet will consider proposals for its 2023/24 budget next week. Despite the difficult financial outlook caused by soaring inflation, the draft report presents a balanced budget for the coming year, with new investment to decarbonise the council by 2030 and upgrade a number of important facilities.

Double-digit inflation and falling income

Rampant inflation in double figures has presented a huge challenge for the UK, and along with residents and businesses, local authorities have been hit hard by rising costs. In autumn 2022, forecasts predicted a £7.9 million shortfall for Chelmsford City Council in the next financial year with big energy bills a particular problem.  

Projections suggest the council, a large user of gas and electricity with three swimming pools and an ice rink, will have to spend around £1.5 million more on energy alone over the coming year.

While inflation has increased costs for all services, important sources of City Council income have, at the same time, gone down. Parking revenues, a key source of funding, are forecast to bring in £1.3 million less than projected for the City Council during 2022/23, with a similar trend expected for next year. An increase in homelessness is also putting council budgets under strain, with more residents needing support during the cost-of-living crisis and temporary housing in short supply.

So, with costs up and income down, a range of measures are being proposed to close next year’s budget gap.

Mix of measures to balance budget

The council has identified nearly a million pounds in savings and efficiencies across its services to help close its budget gap for next year. In December, Full Council also voted to increase some charges to reflect the impact of inflation, such as evening and long-stay parking, to bring in an extra £0.62m.

However, the scale of the funding gap means that, in this very difficult year, a wider mix of measures are needed to balance the budget.

Government funding and council tax

Every year councils receive some funding from central Government and, in December, a settlement for local authorities for 2023/24 was announced. Although this Government funding of around an extra £0.4m has played a part in reducing the deficit, this support alone falls well short of meeting the council’s extra costs.

The Government has also allowed district councils to increase their share of council tax by 3% for the coming year, slightly higher than the figure of 2% usually permitted. The budget report proposes that Chelmsford City Council’s share of residents’ council tax increases by 12p a week (£6.22 in a full year on a Band D home) for 2023/24, and while this is much less than inflation, would raise another £0.4m to help to ease the burden of extra costs.

Any decision to increase council tax is a difficult one to make, but this measure should see Chelmsford residents in Band D pay just over £6 more over the course of a year to help to maintain Chelmsford City Council services.

Rainy day reserves must be used

Although these actions will all play their part, the council has little choice this year but to also use some of its rainy-day savings under these proposals, otherwise it can’t tackle the fallout from the most difficult financial period in decades.

The report warns that, although reserves should go no lower, use of some of these rainy-day funds will provide a buffer, allowing the shock of record inflation to be spread over a number of years and prevent essential services from being cut.

Councillor Stephen Robinson, Leader of Chelmsford City Council says there have been no easy choices.

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"At around 10%, inflation is higher than we’ve seen for decades. This causes huge cost increases (e.g. to heat the swimming pools and fuel the waste lorries) and is outside of the Council’s control. We also need to house more households who are becoming homeless and make up for lost income from car parks.

“However, careful management (including difficult decisions to cut some existing spending) means that we have produced a balanced budget, kept crucial services going, and allowed for spending on some new investment projects.

“These new projects will protect the environment and upgrade facilities such as the athletics centre, multi-storey car park and lighting in some parks.

“Without a bigger funding settlement from central Government, we have little choice but to use our rainy-day savings to help manage the inflation of the last 12 months."

Cllr Stephen Robinson, Leader, Chelmsford City Council

Investment to decarbonise by 2030

The budget also sets out a number of priorities for investment, at the forefront of which is a £6.5m extension to a Green Initiatives Fund with ambitious plans to decarbonise the city council’s activities and operations over the coming years, with the aim of achieving a Net Zero Carbon position by 2030.

The funding, which would continue work to fulfil a key council objective of reducing the authority’s reliance on fossil fuels, includes spending to decarbonise the council’s vehicle fleet, replace traditional lights with LED lighting and the use of new heating technology such as air source heat pumps to replace gas boilers.

Spending and investment assessed

The proposals set out other essential areas for investment, with projects prioritised to ensure the most efficient use of resources.

Spending lined up for 2023/24 would see lighting columns in Central Park and some car parks upgraded to help people feel safer after dark. The refurbishment of public toilets in Central Park and Admirals Park is also listed as a priority for spending next year, along with improvements to the accessible toilets on Market Road in the city centre. Essential maintenance at the city’s crematorium is also on the list for approval, along with an expansion of the gym at Chelmsford Sports and Athletics Centre to improve the centre for its users.

Funding proposals for the following year include a 2-year programme of play area refurbishments for the city and essential resurfacing works at the council’s recycling depot to ensure the council can continue to deliver waste and recycling services complying with the highest environmental standards. Resurfacing works are also suggested for High Chelmer car park to maintain the structure of the building, along with the modernisation of the multi-storey facility’s three lifts.a

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"It’s been an incredibly hard year for everyone, and like our residents, we must make careful decisions about our spending. But it’s crucial that we continue to invest in our city and look to the future too. The events of the last few years have demonstrated the urgency of adapting. The Green Initiatives Fund to decarbonise the council will help to shield ourselves from volatility in the energy markets, protect against the impacts of climate change and reduce pollution in our city.

“Other important projects will make our district fairer and safer over the next few years and I’m proud that Chelmsford City Council remains the most successful Essex council in obtaining contributions from developers to improve our district. We will be using all the resources at our disposal to guide Chelmsford’s growth to be a greener, fairer and more-connected city."

Cllr Stephen Robinson, Leader, Chelmsford City Council

Cabinet to review proposals

Chelmsford City Council’s Cabinet will review proposals for the 2023/24 budget on 24 January and its recommendations will be sent to Full Council, which will vote on the plans next month. Cabinet and Full Council will be streamed live to the Chelmsford City Council YouTube channel and details of how to tune in and meeting agendas can be found here:

Cabinet – 24 January, 7pm

Full Council – 22 February, 7pm

Most meetings are open to the public and you can find out more about attending and speaking at Chelmsford City Council meetings on our website.