County Hall looking for suggestions as to how it can cut £62 million from spending

Posted By on 28th September 2022

By Julia Penhaligon

Cornwall councillors are to be called to a special “all-member briefing” in early November to learn how County Hall plans to cut another £62 million from next year’s spending.

Officials have been told to come up with “Key Lines of Enquiry” for ways they can present a balanced budget.  The cuts come on top of £55 million cuts last year.

An eight-week formal public consultation will start on 11th November.  A final vote on the annual budget is expected in February.

The Conservative-run authority wants to keep council tax increases as low as possible but is nevertheless expected to again put up household bills by the maximum allowed by law.

Many of County Hall’s assumptions have been blown off course by the meltdown in the national economy, with interest rates set to rocket as a result of last week’s tax-cutting budget.

As several banks and building societies now move to withdraw fixed-rate loans, the council is watching nervously to see how the Public Works Loans Board responds.

Servicing debt has become a major item of County Hall expenditure as it continues to gamble on major – and controversial – capital projects such as the £170 million redevelopment of Truro’s Pydar area.  As the cost of borrowing increases, the cost of the Pydar scheme is also likely to increase.

Trouble is also brewing for County Hall staff.  Council bosses had originally thought they could get away with a pay offer of only 2%.  At that time inflation was around 4.5%.  Inflation now is about 10% and set to remain high for the foreseeable future.

Officials are hoping for a final pay deal which could be worth around 6% but the way that this might be presented, and the length of time it might be in place, is unlikely to satisfy trade unions.  A ballot of members is underway with the results expected at the end of October.

An official budget report to be considered by various scrutiny committees in coming weeks says:

“We continue to live through a period of significant financial challenges.  As we emerge from the challenges that the Covid-19 pandemic brought us, we are now faced with the highest rates of inflation for 40 years and a cost-of-living crisis that is affecting the vast majority of residents and businesses, including Cornwall Council.

“Locally, due to the significant inflationary pressures that have occurred over the last six months, we are seeing the impact of higher retail and energy prices and pay costs which in turn increases the cost of goods and services.  This is alongside a higher than budgeted pay offer for our own employees.”

The council’s deputy leader, councillor David Harris, told yesterday’s (Tuesday’s) cabinet meeting he was confident the authority had the right financial strategy in place to manage an uncertain future.  He invited all councillors to submit ideas for reducing expenditure.

“Whilst we had the foresight to set money aside to cope with the significant impacts of inflation, it will not be enough to cover this year’s impact and the compounded impact into next year,” he said.

“We will need to make some seriously hard choices about the service levels we provide and start to look at those areas where spend is because we have a duty to provide a service as opposed to those areas where we have the power to provide a service but no legal obligation.  At the same time we will be looking at bigger projects where we can perhaps delay commencement.”

Cabinet members approved a recommendation that a plan to reduce the council’s capital programme by £13.808m goes before the full council – this reduction concerns previously announced cuts to projects such as the Saints Trail cycle path and the Loggans Moor roundabout.

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