Careful budget planning being undertaken as county council awaits key information from central government

Oxfordshire County Council is planning ahead carefully and pragmatically to meet any future budget challenges, with uncertainty surrounding many elements of future funding for local government and with the long-term impacts of COVID-19 still a huge factor.

All at the council are awaiting key updates during Autumn from central Government on levels of support for councils along with information on whether there will be any changes in the 1.99% Council Tax cap.

A report setting the scene for the forthcoming budget-setting period will be considered by the council’s Cabinet on October 13. The report mentions the potential for savings of up to £25m. However, this is very much just an initial assumption and it will be reviewed at regular intervals as the council receives more information during Autumn and Winter.

The £25m would include £10m of savings already agreed to be delivered in previous budget processes. These savings were to be made through transformation of services and service redesign and the council still intends to deliver on this.

There is extreme uncertainty in government funding for 2021/22 and beyond. A full Government Spending Review is expected to conclude at some point, new funding formulas could be introduced and there is the introduction of 75% Business Rates Retention to consider, the implementation of which is now expected to be April 2022. Director of Finance Lorna Baxter says in her report that this level of uncertainty is “unusual”.

Missing parts of the jigsaw awaited

Councillor Ian Hudspeth, the leader of Oxfordshire County Council said: “The world of local government is waiting to find out how Government will support local councils in the 2021/22 financial year and beyond. Currently we are missing key parts of the jigsaw in terms of how much grant money will be provided and how those key formulas that govern how funding is divided up between councils will impact on us in Oxfordshire.

“The one thing we do know is that responsible and careful forward planning has served Oxfordshire County Council well over the last decade. We have sought to anticipate issues long before they occur and this has meant that we have always been able to set balanced budgets in a clear and transparent way. Responsible and robust financial planning is in the council’s DNA.

“Undoubtedly this year the unpredictable factor that is COVID-19 creates an extra layer of complexity for us, all other councils, central government and many others.”

“We continue to lobby central government at every opportunity for additional money spent on COVID-19 along with a sustainable funding solution for adult social care. We are also lobbying central government for the earliest possible details on finance so that we can plan with clarity for next year’s budget.”

Strong track record of financial discipline

Councillor David Bartholomew said: “We are hoping to hear updates throughout the remainder of the Autumn, culminating in the annual local government settlement which usually arrives in mid-December. Once all that information is in place, we will have a much clearer idea of the financial position.

“Oxfordshire County Council has a strong track record of planning carefully ahead with its finances. Lots of difficult decisions have been made in the last decade and as a result we have avoided being put into the tight corners that other councils have found themselves in. In addition to setting a budget for the forthcoming financial year we always try to put solid planning foundations by having a five year Medium Term Financial Plan.

“Those basic, common-sense financial disciplines will remain at the core of our planning. We would urge central government to give all councils as much clarity as possible as early as they can, while appreciating that Government departments themselves are currently dealing with a uniquely challenging time in the nation’s history.

“We may well have to make some new savings in 2021/22 and beyond but at this early stage it is difficult to be precise with any confidence in the way that we have been able to do at the start of the budget setting process in previous financial years. We will as ever hope to minimise impacts on services.”

Key dates

The Government’s national Spending Review for 2021/22 and the following two financial years may report in November. The provisional Local Government Finance Settlement is therefore expected in mid-December. Each of these key events will incrementally inform judgements as the council moves forward into Winter and the core of the budget-setting season.