Lincolnshire County Council is facing a budget cut of almost £65 million, with Conservative leader Martin Hill admitting reserves will need to be tapped into and services cut even further to ‘cushion the blow’.
Local authorities in England are facing billions of further funding cuts from next April after the government announced provisional financial settlements on Thursday, December 17.
The county council previously predicted that savings of at least £130 million would be needed over the next four years, with a consultation ongoing into how finances should be allocated.
However, the budget cuts in today’s announcement are £10 million worse than councillors were expecting.
As well as cuts to services, the council may have to look into selling assets from April 2016.
Councillor Martin Hill, Leader of Lincolnshire County Council, said: “The provisional financial settlement suggests that for the next financial year, our budget shortfall will be almost £65 million.
“This is nearly £10 million worse than we have been planning for and means our financial challenge is even greater.
“This is due to an unannounced redistribution of funding away from shire counties to metropolitan areas. The government believes that these areas have a greater need for this funding to finance adult social care costs.
“County councils were not consulted about this change and it will not be gradually introduced – the impact of the funding change will hit us in the first year.
“We now have to compile a balanced budget for next year, and will be relying on our reserves to cushion some of this financial blow, as well as serious reductions to services.
“However as our government funding decreases further than we expected each year, and our reserves will be used up, balancing our budget in future years will be even more of a struggle.
“However, the government will be allowing some flexibility in funding the costs we will incur making services more efficient and saving money.
“If we sell assets after April 2016, we will be able to use the money to fund some of these costs in making the council more efficient, though we still can’t use this money to run services on an ongoing basis.”
Govt. settlement today. I am shocked at the severity, we are now an extra £10m worse off making it a £65m savings requirement next year
— Martin Hill (@CllrmHill) December 17, 2015
The final 2016 to 2017 settlement will be laid before the House of Commons in February 2016.
Total funding for local councils will fall by 2.8% in 2016 to 17.
The government will maintain the 2% council tax threshold in order to keep bills down for people (with a separate 2% dedicated precept where councils have adult social care responsibilities).
The county council’s tax precept is also set for a potential rise of 4% in April next year to generate extra income.