Calderdale Council set to have overspent by £5.6m by 2024

Figures from the BBC Shared Data Unit have revealed the shortfall and the stiff financial challenges the council has ahead.

Cabinet members received a report on the authority’s finances for the first quarter of this year this month, and scrutiny councillors will also debate the issue when they meet today (Wednesday).

Senior councillors have been told: “Work has commenced to address this overspend and deliver a balanced position for the out-turn of 2023-24.”

Calderdale is making £3m worth of cuts this year but 2023-24 has seen no overall reduction in services, although this could only be managed by levying a 4.99 per cent Council Tax rise – 2.99 per cent plus another two per cent ring-fenced for social care - the maximum Government allowed.

Calderdale’s savings will come from across directorate budgets and the council was able to find some modest investment, for example to help regulation of private rented housing, in line with Government expectations as well as its own.

According to the BBC data, this year’s £3msaving represents 1.5 per cent of Calderdale Council’s overall £196.65m budget – a sought saving per person of £14.51.

The council is using £2.59m of earmarked reserves – which can only be used for specific purposes – to help balance the books and so far no general reserves have been committed this year.

The council has agreed for some years not to let balances – set aside for emergencies – fall below a recommended minimum of £5m.

Assuming this year’s overspend’s can be eliminated, the council will also face a shortfall of of £3.4m (1.7 per cent of budget over the two years, a predicted deficit of £16.44 per person) in 2025-26.

Savings for 2024-25 of £2.3m and for 2025-26 a further £2.3m are already expected according to the council’s own mid-term financial strategy, which looks at the council’s finances over a three-year period.

The Local Government Association said inflation, funding the Living Wage and energy costs were adding billions to councils’ budgets.

In Calderdale, spiralling social care costs are a major issue.

At Cabinet this month, the council’s deputy leader Coun Tim Swift (Lab, Town) said the wider context for local government was “very frightening” and in recent years when councils had issued section 114 notices – effectively bankruptcy – there had usually been specific reasons, problems and mistakes that authorities had made that could be pointed to.

But the Director of the Chartered Institute of Public Finance and Accountancy (CIPFA) had written about the issue in a recent trade article.

“He was saying ‘how long will it be’ before we see a S114 issued by a council where people are saying, actually it was a well-governed, well-managed council and it is simply that the funding framework for local government is just unsustainable,” said Coun Swift.

Coun Josh Fenton-Glynn (Lab, Calder), who has the Adults Services and Wellbeing portfolio, said councils had been having to make savings each year since 2010.