County council’s cabinet to review plans to meet current and future budget challenges

Oxfordshire County Council’s cabinet will hear of the significant challenges ahead as it is asked to agree its approach to setting the 2024/25 budget at its meeting on 19 October.

The council’s cabinet will review a report that outlines the process for developing and agreeing the budget for 2024/25 and the assumptions on which the council’s existing medium-term financial strategy (MTFS), agreed in February 2023, is based.

It also provides an update on financial pressures continuing to impact on the county council and local government as a whole, set in the context of the national economy.

At this early stage in the budget process, the council is forecasting it will need to manage new pressures of around £30 - £40 million in 2024/25.

However, as is the case every year, this figure will be updated as the council moves through the budget process and will need to be considered alongside information on future funding received from central government and other sources.

What are the pressures on the council’s budget?

All local authorities continue to face significant increases in inflation that are driving up costs and price increases in energy, fuel and materials. These remain above those forecast by government.

Along with the rest of local government, the council is also continuing to experience high demand pressures from the growing nationwide costs of supporting children and young people with special educational needs and disabilities; 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.

There remains prolonged uncertainty about the government’s plans for the future relating to local government financing, including a new funding model for adult social care. Meanwhile, there have been substantial reductions in funding to local government over the last decade, which means the ability to make savings is reduced.

Oxfordshire County Council is not an outlier in facing these pressures – councils across the country are facing exactly the same issues.

Councillor Dan Levy, Oxfordshire County Council’s Cabinet Member for Finance, said: “We know that people across our county are still facing huge financial challenges as we move into winter. Prices are continuing to rise and it is still legitimate to say we are in a cost of living crisis. The county council also continues to face major budget pressures.

“As a council, we are on the frontline of supporting the most vulnerable people in our communities. We are committed to them and their families. However, as the cost of doing this rises and our funding fails to keep pace, we are left facing tough choices.

“Each year the council goes through this initial process of identifying new pressures on budgets and the £30 - £40m figure is where we stand at the beginning of the process this year. We will manage the council’s finances responsibly and we are planning ahead carefully to meet current and future financial challenges.

“We will engage with residents about the big issues that matter most to them and their communities. We encourage residents to take part in budget engagement activities this winter. We will use this feedback to help us shape our budget proposals for next year.”

Currently, the council’s medium-term financial strategy – agreed in February 2023 – 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. This rise would be less than the rate of inflation.

What happens next?

In late November, the county council will publish the detail of its budget proposals for 2024/25.

The proposals will be considered by the Performance and Corporate Services Overview and Scrutiny Committee during December. The committee’s feedback, alongside the results from the 2023 residents’ survey and wider  budget engagement,  will be reported to the council’s cabinet in January before the budget is set at a meeting with all county councillors on 20 February 2024.