Updated budget plans reflect new pressures and include extra money for transport and children and families

Updated budget proposals for 2023/24 at Oxfordshire County Council include more funding than when proposals were first announced in late 2022 but also significant further pressures on services that stem from escalations in inflation and growing demands.

The newly updated position and revised proposals were agreed by the county council’s cabinet on 24 January and would see some previously announced savings no longer being taken forward. These now need to be considered by a meeting of the full council on 14 February.

Meanwhile £4.9 million is proposed to promote access to public transport and improve roads along with £2.3m to help the lowest income households with cost of living pressures. A total of £1m is proposed for people with special educational needs and disabilities and for community hubs to support families and young people.

Councillor Calum Miller, Oxfordshire County Council’s Cabinet Member for Finance, said: “Since the autumn when we set out our proposed budget for consultation, we have seen rapid changes in a very volatile political and economic environment – both nationally and internationally. We were rightly taking a cautious approach by assuming that some government grants would cease. As it turned out, we learned in December that some of these would continue into 2023/24.

“The government has also acknowledged the huge social care pressures being experienced by local government and supplied some of the extra money needed. However, this was done on the assumption that councils will raise more of the finance required through a 4.99 per cent rise in council tax, two per cent of which must be spent on adult social care. Officers are recommending this course of action.

“We are very mindful of the financial pressures facing many Oxfordshire residents so we are proposing allocating money to ensure that the lowest income households do not see this further increase and receive further support in the face of the cost of living emergency.

“We can budget for some additional income but since the autumn yet more new pressures have emerged and even more may still need to be absorbed.

“The consequences of the post pandemic world and its impact on demand in social care are coming to the surface all of the time for councils. Meanwhile, general inflationary pressures that affect the council and its suppliers and contractors become ever more starkly clear. The overall environment remains incredibly challenging.

“Since the summer, we have been in constant dialogue with our residents through various engagement exercises, such as a residents’ survey, our Oxfordshire Conversation events, and our budget consultation that closed 19 December. We have gathered their thoughts carefully and we are able to use them to underpin our budget proposals in this rapidly changing environment.

“Residents have told us that they want us to protect frontline services, particularly in social care and for children, and that they want to see transport improvements in both urban and rural areas. That’s where we will be targeting additional monies.

“Residents also told us there were certain savings they did not want us to make. We have been able to lessen the savings previously announced by focusing on removing one-off savings that were proposed to apply to 2023/24 only. We have removed some deferred maintenance, for example. This means that, overall, our budget is more sustainable with future years in mind.

“We also have the opportunity to address some of the other urgent spending needs including those highlighted to us through our public consultation and engagement exercises.

“We are proposing to target funding at public transport and highways, cycle paths and pavements in both rural and urban areas. This will make it easier for people to access the public travel network and to make safe and pleasant journeys by bike or on foot. It also reinforces the steps we are taking to address climate change, which many residents told us was one of their priorities.

“We also propose to target other areas in line with our overall priorities including special educational needs and steps to establish community hubs to bring support services closer to families and children across the county. We are committed to improving the experience of children with special educational needs and disabilities and their families and to earlier, supportive intervention to help vulnerable children and families. These investments will help us do that.

“It must be stressed that this is an evolving situation. Our cabinet has recommended a budget to full council, which will finally set the budget on 14 February. Even between now and then things are likely to change again – that is the nature of the world we live in just now.

“In summary, we are not having to cut so deeply as expected in November and we are able to do more to strengthen council services, but these remain unprecedented and exceptionally challenging times.”

What has changed since the autumn?

In November, the council launched a consultation on the basis of potential budget shortfalls of £44 million. This was made up of £27m of inflationary pressures and £17m of other demand led pressures with £35m of savings proposed and a £9m overall gap.

Since then, there have been a number of additions to funding from different sources but also rises in financial pressures.

Overall, government has proposed £20.2m of extra funding for social care, made up of £11.3m in grants and a proposed additional £8.9m from an anticipated council tax rise of 4.99 per cent.

There have also been various changes to the distribution of business rates by central government to local government and higher than anticipated funding from some other government grants. Some further grant funding streams - New Homes Bonus and Services Grant – were anticipated to cease altogether in 2022/23 but have not done so. In total, Oxfordshire will receive £15.8m due to these allocations – exceeding cautious assumptions.

Original estimates of the council tax base (the number of homes paying council tax) have been upgraded by Oxfordshire’s district councils, resulting in a £1.1m increase in income.

However, there are also new, recurrent pressures totalling £19.4m since the government’s autumn statement.

New pressures arise from the higher increase to the national wage announced in the autumn and inflationary pressures over and above what was expected earlier in the budget process. Anticipated additional inflationary impacts are on areas such as the cost of delivering both adults’ and children’s social care, waste management, highway maintenance, school transport and streetlighting.

Increased estimates since November are based on the most recent Office for Budget Responsibility predictions for 2023/24.

There are also further demand pressures that need to be absorbed in special educational needs related services and both adults’ and children’s social care. Meanwhile, the council is also estimating a higher national pay award for staff in 2023/24 than was the case when the budget was first announced in November.

These new pressures of £19.4m are in addition to the £8.7m shortfall from the first iteration of the budget that was announced in November. So £28.1m is needed just to balance the books.

Changes to previously announced savings

The previously announced savings figure of £35m would reduce to £30m under proposals being made to cabinet. This reflects feedback from the residents’ survey and the public consultation, where residents opposed certain savings. This includes:

  • Savings on buildings and maintenance to council owned buildings would not now take place. This would have involved postponing maintenance for one year (schools and community facilities were never included in these savings).
  • A one-off £800,000 saving, which would have seen a contribution to a reserve for the purchase of new fire engines suspended in 2023/24 only, would not now go ahead.
  • A previous saving of £306,000 in libraries involving reductions in supplies and services expenditure including reducing spending on furniture, newspapers and equipment plus some online/digital resources will be halved to £153,000 in 2023/24.

Improving roads, promoting access to public transport and encouraging cycling and walking for young people

Responding to the feedback received from people during public engagement, a total of £4.9m is proposed to be assigned to improving public transport and the travel experience for residents in 2023/4.

This includes community transport initiatives in both rural and urban areas (£1.2m); the extension of the current discounted ticket offer at park and rides (£500,000) and expanding the supported transport team to work with young people and their families to develop active travel options for getting to their place of education (£300,000). A further £500,000 will be invested in expanding the School Streets pilot to make it safer and easier for children and parents to walk and cycle to school.

Meanwhile a £500,000 investment is proposed to be made into transport hubs including e-bike hire, car club promotion etc. There would also be improvements to travel information (£100,000) and a push to tackle the areas most prone to flooding, including practical projects with parish councils and proactive ditch clearance – building flood resilience across Oxfordshire (£600,000).

A total of £1m is also proposed for improvements to highways, cycle paths and pavements with a focus on supporting local priorities.

More detail will be available in due course.

Support to children and families

Oxfordshire’s children and young people have been particularly affected by the COVID pandemic and, as the country emerges from it, higher numbers are requiring the support of care services and from special educational needs and disabilities (SEND) teams to fulfil their potential in education.

A total of £500,000 is proposed to be invested in additional staffing to improve capacity for SEND educational and health care plan (ECHP) reviews and assessments. £500,000 is also allocated to accelerate the development of community hubs that will support children and families in accessing support services locally.

Other budget increases

  • A total of £2.3m is proposed to be allocated to Council Tax Support Scheme and cost of living measures to help those most in need in Oxfordshire – ensuring that they do not have pay the full increase in council tax this year.
  • Councillor Priority Fund – repeating the allocation from the 2021 budget that allocated each county councillor £15,000 to spend on very local schemes in their local area over two years. This will cost £1m in total for 2023/4 and 2024/5.

These elements are funded from a one-off receipt of £10m from the better-than-expected Council Tax collection that has been reported by district councils. This element can only be spent in 2023/4 and not on expenditure that recurs in future years.

Meanwhile the council’s overall financial balances need to be raised to the recognised risk-assessed level. It is proposed to allocate the balance of £6.8m to support the council’s financial position in coming years.

What happens next

The annual budget setting meeting of all 63 county councillors will set the council’s budget for 2023/24 on 14 February.