Chesterfield Borough Council faces “extreme budget pressures” – with overspend this year expected to reach over £750,000

Chesterfield Borough Council (CBC) released its budget monitoring report yesterday, which confirms that financial challenges have led to a forecasted six-figure overspend by the authority from its £12 million net revenue budget.

CBC said that these difficulties include ongoing risks and uncertainties over future Government funding, the long-term financial impact of Covid-19, and a period of exceptionally high inflation – with the cost of buying goods, services and contracts rising across the board.

The areas where the council expects to be hit hardest include its net rental income from the Pavements Shopping Centre in the town centre, which is £465,000 lower than expected.

The budget monitoring report said that this was due to the renegotiation of leases to retain tenants, and other leases at the centre not being renewed.

Town centre units are also seeing increased void rates, according to the report, which has impacted the council’s ability to raise funds through rental income, service charges and business rates.

The loss of car parking income was another significant hit to the council’s budget, with a net reduction of £463,000 – exceeding the £400,000 estimate included in the 2023/34 budget.

The authority said that income from all of its car parks was lower than expected due to the restricted recovery of the post-pandemic economy, with cost inflation and higher fuel prices hampering town centre footfall.

The largest pressure on the council’s budget was the £550,000 cost of waste contracts – with recycling contracts in particular posing problems for the authority. An inflation contingency, providing an injection of £550,000 to the budget, was established by CBC to cover this cost.

A net budget pressure of £232,000, mostly relating to additional ICT costs, was highlighted by the report. The council was also forced to spend £33,000 over its housing budget on evicting travellers, along with enforcement activity relating to private landlords.

One positive from the budget report was that the Waterside development has proved successful – contributing to a £121,000 boost to the council’s coffers from its commercial properties, innovation centres and industrial units. Venture House at Sheepbridge, however, had underperformed in terms of income over the last 12 months.

The council had made a saving of £137,000 on salaries, and an additional £200,000 was forecast to be generated from planning schemes which were expected to be submitted in 2022/23 – but were now anticipated for 2023/24.

The budget monitoring report showed an overall forecast overspend of £774,000 for this financial year, with previously estimated budget shortfalls of £2.5 million in 2024/25, rising to £3.4 million in 2026/27.

The council’s leaders have moved to reassure residents, highlighting that they are making progress in line with the council’s budget strategy, which was adopted in July this year.

Coun Amanda Serjeant, deputy leader of the council and cabinet member for finance and asset management, stressed that the financial difficulties facing the authority were out of its control – and that CBC was committed to doing all it can to protect local services.

She said: “This is not a financial crisis of our making – the position we find ourselves in is largely due to current economic factors outside of our control, compounded by historic and piecemeal Government underfunding of the sector.

“Nevertheless, we are not immune to the impact. As community leaders we must respond to these extreme pressures in a responsible and sustainable way, and we stand ready to make the difficult decisions which are needed to protect the essential services which the most vulnerable in our community rely on – especially in the current cost-of-living crisis.

“Whilst the budget monitoring report for the period April through June 2023 paints a difficult picture, we have in the last couple of months started to see the impact of the council’s new budget strategy in action.

“There are green shoots of recovery in some of our core sources of income, and we are starting to see savings coming through from work we have already carried out to manage demand for our services and control costs to the best of our ability.”

The report also sets out how the council is working hard to deliver £1.035m worth of savings that were approved as part of the budget setting process for the current financial year.

READ THIS: School meals: Derbyshire County Council to debate price increase after 7,500 sign petition

The council, however, acknowledged that further difficult decisions lie ahead if it is to meet its legal duty to set a balanced budget in February 2024, and in future financial years.

Coun Serjeant added: “We’re changing the way we do business to help us meet the budget pressures of future years. Current actions include investing in digital technology, adopting a more commercial approach to delivering some services, reviewing the use of buildings to help lower the council’s bottom line and making sure all of our services are delivering the very best value for money.

“In parallel with these actions there will also be a reduction in the size of the council’s workforce through voluntary redundancy and voluntary early retirement.

“Inevitably there will be consequences in relation to our ability to continue to deliver all of the council’s services to the same levels and standards. This might mean stopping the delivery of some services and / or reducing how much we deliver of others. Where this is the case, we will communicate and consult with local people about our intentions and, where appropriate, explore alternative ways to deliver these services if possible.”