This week there will be only one topic – finances.
I referred to this last week but have had queries from residents and thought it appropriate that I provide more clarification.
I am very aware that the cost of living and how to manage increasing expenses is on many people’s minds, and it is no different here at the Council. We have always been prudent in our financial management here in Solihull. Reductions in government funding over the years, combined with exceptional demand for services, is now placing an unprecedented strain on our budget, despite our long-established careful approach to spending.
We are not unique in this: local authorities across the country have been feeling the pinch for some time, and we have used various financial levers at our disposal like cash reserves and restructuring budgets over the years to manage it, but this is not a sustainable long term solution – we need clarity, investment, and longer-term settlements from central government in order to deliver the vital services our residents need. We will be making a detailed submission to the government about the financial challenges we and all councils are facing in advance of their autumn statement. We will be very clear about our concerns, and trust that they will be taken on board by the treasury.
Since we approved the balanced budget for 2024/25 there have been a number of new costs and a reduction in council income. This has caused a forecast budget deficit of £7.7 million. Much of this is due to increased costs – in Children’s Social Care for example but also in Education, relating to the increase in the number of children with Education, Health and Care Plans to comply with statutory duties. There is also a reduction in business rates income to contend with.
Many of the pressures that have led to this situation are entirely outside our control, but it is our duty to take action to address the shortfall. We’ve already begun to do so, applying our well-honed sense of financial prudence to this new challenge. We have implemented a Council-wide freeze on all non-essential spending. We’ve also implemented vacancy panels in all Council departments that review the need to recruit to posts when they become vacant. We have carried out a full review of all spending on agency staff and consultants.
We are also lobbying government to provide better, more sustainable funding for our statutory responsibilities. I want to be clear, this is not political. I wrote a letter to the previous (Conservative) chancellor last October raising my concerns, so please don’t think this is a party matter - this is about services and, crucially, about people. We spend around three-quarters of our entire budget on ‘people services’ - adult and children’s social care. We’ve also had an increase in costs relating to homelessness which is currently under-funded by government. The level of the grants we are given to pay those costs were set more than ten years ago and are long overdue for a review. These are statutory services we must deliver, which are facing spiralling demand.
It doesn’t leave us much wriggle-room with the rest of the budget, but we are always looking at how we can provide services in the most cost-effective way, and we’ve renewed that process now.
I am not writing this to scare our residents about service provision, I hope they can trust our record of delivering services effectively for many years now and know that we will continue to do this to the best of our ability. I simply wish to be transparent. Times are tough, and we need government to help us plan by implementing multi-year financial settlements and seriously considering how social care services are funded.
I’m sure this will lead to a number of questions, so we’ve prepared answers to those which we expect most residents will want answered now rather than later, and you can read that here.
Whilst these are challenging times, I’d like to end with some better news. I am pleased to be able to announce that the Household Support Fund, which was due to end at the end of this month, has now been extended until 31 March 2025. I lobbied for this as part of a letter that was sent by the leaders of West Midlands Metropolitan Councils to the Deputy Prime Minister in August, and signed The Children’s Society letter on the same topic. This Fund will continue to provide essential support to our residents that need help with food supplies, energy costs & home energy improvements, essential white goods and financial advice. The council’s officers will make sure that this funding is distributed as soon as possible to those who need it.
Thank you for reading.
Councillor Ian Courts, Leader of Solihull Council.