Concern at £28.5m funding gap in Cambridgeshire County Council budget

A £28.5million funding gap looms in Cambridgeshire County Council’s budget amid spiralling inflation and rising energy prices.

The council leader, Cllr Lucy Nethsingha (Lib Dem, Newnham), has warned “tough choices” lie ahead as the authority aims to bridge the gap.

When the 2023-24 business plan was set in February, the county council expected a £17m shortfall. But this has shot up due to inflation levels not seen for more than 40 years, spiralling energy prices and the government’s decision not to hold a spending review - meaning the rising costs will have to be met through existing funding.

Significant costs are expected when national adult social care reforms come into force next autumn, when an £86,000 cap will be introduced on the amount anyone in England will need to spend on their personal care over their lifetime, along with a more generous means-test for local authority financial support.

Looking further ahead, the council - run by a coalition of Liberal Democrats, Labour and Independents - predicts a £108m shortfall over the five years from 2023 to 2028.

Cllr Nethsingha said: “We are determined to make good on our pledge to create a greener, fairer and more caring Cambridgeshire. And we will continue to do everything we can to help our residents manage these increases and protect the services for the most vulnerable. But I can’t deny that we are going to have to make tough choices.”

Public sector pay increases and increased bills means the council was already reporting a projected in-year gap of £2m - about 0.5 per cent of its overall budget.

Cllr Elisa Meschini (Lab, King’s Hedges), the council’s deputy leader, said: “The huge increase in costs the council faces come from a situation which is not in our control. We are continuing to do all we can – working with others like the county council’s network – to force the government to acknowledge the vital nature of the services we provide and provide the funding that will allow us to continue to deliver them.”

The council’s strategy and resources committee is due to examine the budget deficit at its meeting today (October 20).

A report to committee says the council expects to be meet the costs of inflation on its revenue budgets this financial year, but has significant concerns for next year and the next four years of its medium-term financial plan.

It notes: “Central government has so far given no indication of further funding to councils to meet pressures, and therefore we are planning on the basis of needing to close this budget gap almost entirely through decisions within the council’s control.”

The report warns the council will need to make more savings, maximise grant funding from the government and deliver value for money in managing its large contracts.

It is also allocating investment from the Just Transition Fund - a funding package intended to aid social mobility, while tackling flooding and climate change. In June, a further £4.4m was allocated, taking the total funding earmarked to nearly £10m.