Welwyn Hatfield Council not immune from current cost of living crisis.
On Tuesday 6 September, Welwyn Hatfield Borough Council’s Cabinet is being asked to note the current status of its finances when the Medium Term Financial Strategy Report is tabled.
After a turbulent start to the year, what state is the budget in?
Up until recently, Welwyn Hatfield Council has fared pretty well financially in comparison to other authorities. This is largely due to services being reduced and fees being increased or introduced for the first time. Douglas Tilbe House closed through lack of funding, the cost of visiting the cinema, Mill Green or other council-run facilities has gone up substantially and brand new charges have been introduced for things like garden waste.
The important thing to note is what the council calls the budget gap. This is basically the difference between the council’s outgoings and income. This grew substantially when Central Government changed how it financed Local Authorities back in May 2010 under the then coalition government. Overnight this meant that Local Authorities had to find alternative streams of income (or vastly reduce expenditure) in order to make ends meet.
Taking a look at the projected budget gap for the 2022-23 financial year as approved by the Council in February this year, figures predicted back then are shown below.
| 2022/23 £,000 | 2023/24 £,000 | 2024/25 £,000 | 2025/26 £,000 | |
|---|---|---|---|---|
| Cost of services | 13,350 | 13,175 | 12,899 | 11,972 |
| Other income and expenditure | -13,277 | -11,661 | -12,518 | -11,593 |
| Budget Gap (single year) | 73 | 1,441 | 381 | 379 |
| Budget Gap (cumulative) | 1,514 | 1,895 | 2,274 |
Six months into the year, the picture is looking rather different:
| 2023/24 £,000 | 2024/25 £,000 | 2025/26 £,000 | |
|---|---|---|---|
| Budget Gap – upside risk | 3,419 | 3,888 | 3,835 |
| Budget Gap – standard approach | 4,479 | 5,769 | 6,492 |
| Budget Gap – downside risk | 4,991 | 6,510 | 7,222 |
The predicted gap in 2025/26 (not even worst case scenario) has almost tripled to £6.5million.
The uncertainties around fuel costs and inflation are the main causes of the different figures quoted above, with a “best case” and “worst case” scenario illustrated. This year for example, it is now estimated the council will be spending £1m more than they expected on utilities and fuel, and even more than that as additional contractual spend due to inflation.
The report goes on to list various options the council is considering to address the budget gap when setting next year’s budget. These include taking difficult decisions in relation to frontline services and increasing fees and charges by a minimum of inflation.
The report admits that the council has challenging targets to meet the savings required and officers will be working on proposals with member portfolio holders over the next few months.
What does all this mean for residents?
The report mentioned that next year’s budget will see an increase to all non-statutory fees by a minimum of inflation. A quick look at last year’s budget book showed that carer’s parking permits have increased by 16.7%, skate hire at Roller City has gone up by 20% and visits to Mill Green have rocketed for children by 50%. The increase in prices for use of council-run leisure services certainly seem to stand out at more than inflation.
Take a typical family, 2.4 children (we’ll round that down for the maths) going to the cinema on a Saturday afternoon. Back in the summer of 2020, that would have cost them £20. The following year, a 20% increase in the ticket cost meant a similar day out would then cost them £24. Fast forward another twelve months and the “family film” option has disappeared. Ticket prices for all films is now the only option. This family of four would now need to pay £39.50 to watch the same film. That’s a percentage increase of another 64% which isn’t visible in the budget book but would make a big difference to that family. Side note, the MTFS comments that business at Campus West hasn’t returned to pre-pandemic levels; at these prices, there’s no wonder!
Residents can expect council tax to increase again this year, with the Council having set their own precedent the last couple of years by setting the increase at the maximum allowed before referendum.
Also, with the phrase “it is acknowledged that there may need to be difficult decisions taken in relation to frontline services”, further cuts to either the quantity or quality of service provision are implied.
Monthly bin collections, reactive rather than proactive pest control and reduced litter picking could all be on the cards; resulting in swarms of rats taking over our towns and villages.
Of course what you won’t see in the MTFS report is any proposal to find savings through reducing how much councillors get paid to chair meetings or an explanation as to where the community bus replacement fund has gone.
The Cabinet will be noting the report on the MTFS before it decides on whether to look at the Hardship fund proposed by the Cabinet Planning and Parking Panel on 18 August 2022. After hearing how bad the finances are proposed to be will the fund even get any discussion time?
Watch the Cabinet meeting live (or any time later) at 5pm on Tuesday 6 September here.
