Doncaster Council facing estimated budget shortfall of £13 million

Doncaster Council is facing an estimated budget shortfall of £13 million, it has been revealed.
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Doncaster Council has today (September 21) published an updated financial position for 2021/22 to 2023/24, taking into account the impact of the coronavirus pandemic on its budget.

Forecasts now estimate a budget gap of around £13 million over three years. This figure is based on the most likely scenario however, worst case scenario planning indicates this could rise as high as £23 million by the end of the period. These figures underline the uncertainties about trying to plan and manage fluctuating budgets during these unprecedented times.

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So far this financial year (2020/21) the council has incurred new and additional costs to support services during the pandemic at the same time as losing income through reduced trading activity, pausing services and a reduction in council tax and business rates payments. Due to the unforeseen circumstances there has also been has been a delay in delivering savings and the council is set to continue facing increasing costs and reduced income due to physical distancing measures and changing behaviours.

Doncaster Civic Offices.Doncaster Civic Offices.
Doncaster Civic Offices.

Mayor Ros Jones said: “Forecasting the financial position for the next three years has been extremely challenging due to the sheer number of unknowns, which is unprecedented. The pandemic has happened at a time when we are still facing significant uncertainty in relation to funding. As well as volatility in our costs and levels of income as a result of coronavirus, the national comprehensive government spending review has been delayed which makes longer term financial planning difficult.

“Thankfully we are a financially well managed council and despite significant cuts in government funding since 2010, through careful planning we have always managed to set a balanced budget allowing us to protect our most vulnerable residents in our communities and continue investment in the borough.

“In March 2020, full council approved the Revenue Budget for 2020/21 which indicated how the council planned to balance the budget for this financial year. We now have to revise those plans accordingly due to the unprecedented coronavirus pandemic. Although the position remains uncertain, we anticipate that the 2020/21 in-year position can be managed through the application of existing government funding and re-structuring of in-year departmental budgets. This is reassuring and means we can continue to work very hard to support our most vulnerable residents and local businesses during this difficult time and as we enter a ‘new normal’.

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“We must however acknowledge that we are still in a volatile situation with coronavirus, therefore the financial impact and how we bridge that budget gap beyond March 2021 are among the top priorities for us in the months ahead as we move through this unprecedented time. One thing for certain in these uncertain times is that we will continue to support Doncaster people, communities and businesses and will be calling on the government to adequately fund councils in this difficult situation. We are not alone, hundreds of local authorities are facing their own financial challenges.”

Once again the council is taking a robust approach to identifying the scale of the financial challenge and over the next few months we will be looking at how we bridge the gap. This will be in line with the Mayor’s Restart, Recovery and Renewal Plan which is helping to support local people, local businesses and local voluntary groups, and to mitigate the impact that COVID-19 has had on the borough’s local economy. Although the recovery period is up to March 2021, many of the actions will extend beyond then and will be taken forward within a new longer term Borough Strategy and Corporate Plan for 2021-22.

As always there is a commitment to protect jobs and frontline services where possible. When the budget was approved in March 2020, an estimated 33.6 full time equivalent (FTE) potential post reductions were identified. This estimate will be updated in preparation for the budget approval in March 2021. Given the increased budget gap it is envisaged that the number of post reductions may increase.

The updated plan continues to include a 1.99 per cent Council Tax increase for each financial year, this provides additional income of £2.2m in 2021/22. Doncaster continues to have one of the lowest Council Tax rates in comparison to other Metropolitan Districts and Unitary Authorities (the 11th lowest in 2020/21).

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The financial plan is being considered by Cabinet on September 29. This is an interim stage of the budget setting process. Further work will be undertaken over the next few months to develop ways to meet the increased budget gap identified. The local government settlement in December will also influence the updated Medium Term Financial Strategy in January 2021 and the final budget that will be considered by full Council on 1st March 2020.

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