Inflation pushes Chelmsford council budget gap to £4.2 million

July 14, 2022 3:23 PM

moneyInflation has significantly increased Chelmsford City Council's budget gap, according to a new projection. The latest forecast of council finances estimates a shortfall of £4.2 million for 2023/24 - much higher than the deficit of £1.7 million expected as recently as last February.

The Council's Cabinet noted on Tuesday the updated forecast, and Full Council will decide on 20 July whether to allow some of the council's rainy day savings reserves to be used to bring down the gap to around £3.2 million.

The bigger shortfall has been caused by soaring inflation affecting the whole economy, resulting in greatly increased costs, lost income, and greater demand for key services such as temporary accommodation. The unpredictability of world events means that the forecast is likely to need significant revision in the months to come.

Council Leader, Stephen Robinson, said, "We are all relieved to move on from the restrictions of the pandemic, but in some respects the last few months have been just as difficult, as everyone in the country is now dealing with a cost-of-living crisis. We know many of our residents are struggling with rising bills. We (and every council in the country) are facing similar problems. Chelmsford City Council will have to spend an EXTRA £480,000 a year to heat our leisure centres at Riverside and South Woodham and an extra £300,000 for fuel to keep our fleet of bin lorries, street care and parks vehicles on the road."

Although Chelmsford City Council collects all the council tax in the borough, it only keeps 11%, with the other 89% split between Essex County Council, Essex Police, Essex County Fire and Rescue Service and parish councils.

Council tax revenues aren't Chelmsford City Council's only source of income, but its other income is also down as a result of both the cost-of-living crisis and changes brought about by the pandemic. On top of big inflationary pressures in the form of rising costs, councils are also expecting the money they receive from central Government to go down in the next financial year. Cllr Robinson is urging the Government to properly support local government services at such a critical time.

Chelmsford City Council's Full Council will decide whether to accept the recommendations in the Medium-Term Financial Strategy when it meets on Wednesday 20 July. The meeting will be streamed on YouTube from 7pm and details of how to watch will be posted on the council's website.

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