Sefton Council is looking to meet a £45.3 million funding gap over the next three years as it continues to operate in “an extremely challenging financial environment”.
The local authority is due to set its annual Budget at Southport Town Hall next Thursday (13th February 2025) where councillors are expected to back proposals for a 4.99% Council Tax increase.
The current Council Tax bill paid by local residents in Band C homes this year is £1,730.14.
The rise would include the maximum 2.99% Council Tax rise allowed without holding a referendum plus a 2% Adult Social Care Precept.
The increase over the next three years would generate £5.085 million in 2025/26,£5.353m in 2026/27 and £5.636m in 2027/28.
The council is facing huge challenges with rising Adult and Children’s Social Care costs.
This risk has been reported over the last 3-5 years within the council and has been focussed on the number and cost of accommodation for children who require support. As a result, it has been the main area of the Council where the budget has grown, increasing from about £40m in 2018/19 to £82m in 2024/25.
Sefton will also seek to plug the gap through some savings and price increases.
This would include:
- £4 million savings over the next two years through the “Better at Home” Transformation Programme Project
- Ending the annual £237,000 subsidy to Formby Pool as the site is profitable
- Saving £1.168 million through reviewing its street cleaning and cleansing operations, including its role and responsibilities with its partners, and also the associated enforcement activity with a view to improving the cleanliness of the borough
- Saving £1.09 million through the Transformation Programme Project “Education Travel Support”
In the Budget report, it said: “The current year has seen a forecast year-end overspend of £17.8m being reported (before mitigations), driven by increased need, demand and cost in Children’s Social Care, Adult Social Care and Education Excellence via Education Travel Support costs.
“The impact on the 2025/26 budget is that £11.6m will be required to be added to the budget gap due to these issues and is the first call on resources.
“This is clearly a significant issue that makes budget setting, and then the delivery of that budget, much more difficult with no room for political choice or flexibility and a requirement to deliver.
“This is compounded as the pressure, volatility and unpredictability in these areas makes financial planning more difficult and thus increases the financial risk.
“The Council has a residual funding gap before any council tax increases of £45.3m between 2025/26 and 2027/28, and after potential council tax increases of £18.5m across the three years, with £5.6m in 2025/26. Savings options to bridge the gap in 2025/26 (and partially meet the gaps in 2026/27 and 2027/28) are therefore proposed.
“The financial risk being faced by councils and Sefton cannot be underestimated.
“It should be noted that budget gaps would remain in 2026/27 and 2027/28 even if maximum Council Tax increases were approved.”
It added: “Within the sector, and as previously reported, a number of councils due to the well documented funding issues of the last decade are in financial difficulty, arising from the ability to meet in year pressure or set robust, deliverable budgets – as at November 2024 there were 19 councils in receipt of exceptional financial support from central government with more expected to follow.
“This situation reflects historic underfunding at a time when demand and cost for key services such as Children’s Social Care, Adult Social Care and Education Excellence has risen substantially and far beyond annual funding increases.
“Within the funding settlement for 2025/26 the government has signalled the start of a review process but there is a long way to go for the sector to be on a sound financial footing and the risk facing all councils has not diminished.
“It is acknowledged that the sector is in need of fundamental reform and significant additional funding, that a programme of prevention is required to reduce demand and that further problems will be experienced by councils, most of which will need to make substantial savings in 2025/26.
“The financial environment that all councils are operating in is extremely challenging with key decisions on service delivery being required to ensure financial sustainability can be delivered.”
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