Chelmsford City Council agrees budget for 2021/22

Chelmsford City Council has agreed its budget for 2021-22. The plan aims to protect essential services, boost the local economy, support struggling people and address the costs of the pandemic. It also continues to make Chelmsford fairer, greener, safer and better-connected, as promised in the council’s four-year plan.

Like families and businesses across the country, local authorities continue to be hit hard by the financial impact of COVID-19. Chelmsford City Councillors voted through the authority’s spending plans for 2021-22 on Wednesday 24 February.

A £7.6 million gap

To address a potential funding shortfall of £7.6 million, councillors agreed a number of measures. The council will make cost savings, manage reserves carefully and bring in new income to pay for key council activities.

The proposals were accepted at a virtual meeting of the full city council, streamed on its Facebook page. 29 councillors voted for the proposed Budget, 22 voted against and one abstained.

The council will be spending around £56m on day-to-day services.

The pandemic and council budgets

Like other councils across the country, Chelmsford has faced huge financial losses that have been documented throughout the pandemic. In June, the authority announced an expected deficit for 2020/1 of £8.6 million. Losses included income that would normally come from leisure centres, museums, theatres, events and car parks. The pandemic has also increased costs because some council services are needed more, like homelessness and new benefit claims.

The gap got bigger. By July, it had risen to £9.5 million. It has continued to grow, with over £13 million now lost in income. 

Councils had some help from the state last year. The Government agreed to provide funding for some of the council’s losses. That still left a shortfall of £3 million for 2020/21 and a gap of £7.6 million for the coming year. To continue providing services, the council needed to fix this gap.

The budget signed off in February includes £5.3 million found through savings, new income and action by the council. Alongside £2.3 million of one-off Government funding, that solves the financial problem.

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“Local authority budgets are quite complex and unlike the budgets people are used to running at home. When a council says it has lost income and needs to make it up, that means it’s trying to balance the books. The Council must have enough money to run everything that it has to run in order for society to function. That includes support for vulnerable people, rubbish and recycling collections, parks, CCTV, business support and so on.”

Cllr Chris Davidson, Cabinet Member for a Fairer Chelmsford

Support where it’s needed most in Chelmsford

As part of the budget plans, the council also proposed a package of support for those who the pandemic has hit hardest financially, as well as for local businesses and struggling sectors. It also pledged continued funding to deal with what Cllr Davidson called “the greatest threat to our way of life”: the climate and ecological emergency.

By April, the council will have spent nearly £7 million on new temporary housing. The budget includes plans to invest another £10 million in housing and homelessness relief. This will boost affordable housing, give homes to many of the 250 homeless families in Chelmsford and house rough sleepers. Cllr Davidson said, “People everywhere are short of money and struggling to pay their bills. It has never been more important to make housing – a basic right – more accessible for all.”

To help the city centre to recover from the pandemic, charges at city centre car parks have been frozen. They will not increase in 2021-22.

The council is supporting the local arts sector with a £1 million investment in Chelmsford City Theatres. This will help to bring jobs and shows to the city and generate new income for the council. “This was a fast-growing sector before the pandemic, so targeted investment and attracting more visitors will help it to get back on its feet,” explained Cllr Davidson.

The council’s climate emergency plan will also continue. It includes more mass tree-planting, reducing the council’s carbon footprint and pressing developers to reduce their carbon impact. “Climate change is real and addressing it will help our economy to recover,” said Cllr Davidson. “We need to address this now to ensure the future for our children and grandchildren – it’s not optional.”

<h2">Making savings

The council is also looking to its own efficiency to make savings. This includes savings on insurance and other contracts, smarter use of technology, removing some posts and controlling other staff costs, reducing the use of paper, and so on. That creates cost reductions of £1.5 million.

The council hopes that some of its losses are temporary and has therefore used £1.3 million of reserves to support the Council’s budget in 2021-22. However, Cllr Davidson warned that, “it is not sustainable to live on savings indefinitely, and the use of rainy-day savings is not a long-term solution.”

Chelmsford council tax increase kept small

The Government has allowed local councils to raise council tax by up to £5 from April without a local referendum. It suggested this as a way to support local services through the pandemic. Chelmsford City Council’s proportion of council tax will rise by 2.49% for 2021/22.

This equates to £4.95 per year (41p a month) for a Band D property. The city council collects the tax, but only keeps 11% of it and it is only 23% of the council’s total funding.

Councillor Davidson said, “For the past six years, the City council’s share of the Council Tax has increased by just under £5 a year on average, so this increase isn’t unusual.” 

‘Open to ideas’ to make parking charges fair

At the meeting, a number of members of the public asked questions and presented a petition about the introduction of parking charges at Hylands Estate.

The principle of charges is now agreed and included in the budget. However, there is an ongoing consultation into exactly how the charges will work, who will be eligible for concessions and discounts, and whether the proposed structure of charging is fair.

The Leader of the Council, Cllr Stephen Robinson, said, “The charge is unfortunately necessary if we are to maintain this beautiful park and balance the books. Our budgets are under great pressure and we need to continue providing essential services. So we need new income sources for the longer term. However, we know how important the park is to residents and we are open to ideas for making the parking fees as fair, tolerable and good value for money as possible for you. Please use the consultation to let us know your preferences.”

A huge challenge for Chelmsford

Presenting the budget, Cllr Davidson said, “It has been a huge challenge to maintain, and in some ways expand, our services to Chelmsford’s residents through this pandemic.  We were able to do so with the hard work and dedication of our staff. 

“Unlike many other local authorities, we have kept our services going to the maximum extent allowed. We maintained all our bin collections and we kept our parks open.  We also provided new Covid-related services. The community Hub ensured vulnerable people had food and other essentials. Staff at the council co-ordinated Chelmsford’s response to the pandemic. We helped to enable testing, supported the reopening of the High Street in summer, distributed over £48 million in business support grants and administered £40 million in business rates holidays. 

“And we’ve done our best to be innovative, seeing Covid-19 as an opportunity as well as a challenge. We have continued to hold council meetings, virtually instead of in person, and also introduced virtual Cabinet Q&A sessions. These have enabled far more residents to participate in local democracy.  We have also developed videos to explain the council’s finances and to showcase our museum.  These will be lasting improvements in the way we engage with residents.”

Read the budget in full

Council budgets are public documents. You can see exactly how much council tax, income and funding your local council receives and how it is spent. Read the new Chelmsford City Council budget in the documents for the Full Council meeting on 24 February