Budget shortfall grows by £2.1 million after central government funding announcements

A funding gap of £9.1 million in Oxfordshire County Council’s plans for 2024/5 has now grown to £11.2m following central government’s annual allocation of funds to all councils in England for the next financial year.

Proposals to save more than £9.8 million in 2024/25 were set out in November by the county council as it seeks to set a balanced budget in the face of continued inflationary pressures and growing demands.

The detail revealed by central government to each individual council on local government settlement day (18 December) means that this gap has increased to £11.2m. Grant funding support was not as much as anticipated.

Councillor Dan Levy, Oxfordshire County Council’s Cabinet Member for Finance, said: “We did not receive any additional money to close what was a £9.1m gap when we first published our draft budget in late November.

“The government has spoken widely about a 6.5 per cent increase of funding to local government. Sadly, this is a case of smoke and mirrors. This increase assumes councils take the maximum council tax rise and includes funding announced this time last year. There is nothing new in this sum at all.

“Local government as a whole has expressed its deep disappointment. We are clearly now going to have to take some really tough decisions.”

“As has been known since late November our budget proposals for 2024/25 already include more than £9.8m of savings. The whole of local government was already looking at the second half of the decade with great concern and the government’s announcement on 18 December did nothing to alleviate those concerns.

“Our track record of responsible financial management means that Oxfordshire County Council has been in a more resilient position than many other authorities. However, the overall position is extremely challenging and additional savings will need to be found.”

All local authorities are having to deal with the continued impact of slower than forecast falls in inflation in the UK during 2023 and the consequent continued high levels of costs and prices for energy, fuel, materials and staff costs.

The council also continues to experience demand-led pressures and the effects of the growing nationwide costs of supporting children and young people; the rising cost of social care and care placements for both children and adults; and a national shortage of social care workers leading to a reliance on agency staff and higher costs. The overall projected budget for 2024/25 is more than £614m.

The council’s Performance Scrutiny Committee will be updated on the position at its meeting on 19 January before an updated draft of the budget is presented to the council’s cabinet on 30 January.

The draft budget is based on a 4.99 per cent council tax rise in 2024/25, with two per cent of this being ringfenced for adult social care. No final decision on council tax or any element of the budget will be taken until 20 February 2024 when all 63 county councillors meet at the annual budget setting meeting of the county council.