Sefton Council Tax bills facing 4.99% rise after rising inflation, energy costs and social services costs

Rising inflation, rocketing energy prices and increasing wages are having a multi-million pound impact on Sefton’s Budget this year that presents “a real threat to the financial sustainability of the Council”. 

It means councillors are likely to increase people’s Council Tax bills by nearly 5% this March.

A host of other savings are being made including a recruitment freeze on all but essential council positions, closing some council buildings and a reduction in the Highways Maintenance fund. 

When Sefton set its annual Budget in March last year, inflation stood at 2-3% while war in Ukraine had yet to commence.

Councillors meeting to look at Budget options at Bootle Town Hall next Tuesday (7th February 2023) will be told that local government in Sefton is under “extreme and unforeseen financial pressure that has been driven by inflation”. 

The black hole in Sefton’s Budget is being driven by: 

• A £17 million overspend in Children’s Social Services 
• An extra £3.6 million on wages, after rising inflation led to a 6.5% pay increase 
• £4.2 million extra costs due to global increase in energy prices

Council officers say that “it is now estimated that the funding shortfall between 2023/24 and 2025/26 will be £33.996m, before any savings are approved or Council Tax decisions are made.”

The local authority also has to find £3 million to carry out the repairs to Southport Pier, which has been closed since the damage caused by icy sub-zero temperatures in December.  

By raising Council Tax by the maximum 4.99% allowed without a referendum would raise a total of  £ 7,548,000 during the 2023/24 financial year.  

The 2022/23 Band C Council Tax bill, including precepts, was £1,871.43.

The proposed total increase in the Sefton Council Tax for 2023/24 will be reported to the full Council following any recommendation from Sefton’s Cabinet. 

Money will be saved through:

• Recruitment freeze, (saving £1.255 million) 
• 15% reduction in Highways Maintenance Works Budget (£500,000)  
• Reviewing pension contributions (£1.9 million)
• Savings from closing council buildings such as St Peter’s House, Pavilion and Crown Buildings and Ainsdale Hope (£440,000)
• Below inflation increases in fees and charges for Leisure related activities (£200,000). 

A report by Sefton Council Executive Director of Corporate Resources and Customer Services Stephan Van Arendsen said: 

“Local government has been placed under extreme and unforeseen financial pressure that has been driven by inflation. 

“This has impacted on energy costs, key Council services and pay at the same time that there has been a significant increase in the Children’s Services agency and accommodation charges being paid. The issues in the agency market have fundamentally changed the workforce in this critical space. 

“In addition, the Council has continued to experience a significant increase in referrals for Special Educational Needs and Disabilities (SEND) services and the service has had to increase staffing levels to tackle the demands, service levels have increased, and it has become more challenging to secure school places in our mainstream schools. During the year there has been no central government support for these emerging pressures aside from energy costs. 

“As a result, with inflation at over 10% during the year compared to the 2-3% Spending Review assumption, and pressure on Children’s Services increasing on a month-by-month basis, this has left Sefton, and all councils, needing to implement substantial remedial plans and utilise scarce reserves and general balances in order to meet the in-year budget gap. 

“It can be seen from the latest in- year monitoring reports that most services, as a result of the financial planning undertaken, are in a stable financial position, however the situation regarding Children’ services is extreme with an in year overspend of over £17m as at the end of December 2022. These matters present a real threat to the financial sustainability of the Council.

“It is evident across the sector with most councils having to make budget and service reductions that there is insufficient funding available to local government and this is the case for Sefton.” 

Councils can increase Council Tax by a maximum of 2.99% plus an additional 2% for an Adult Social Care levy without going to referendum. 

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