Work has begun at Dorset Council on setting the budget for next financial year, 2023-24. A report to be considered at the Cabinet meeting on 4 October shows that Dorset Council is currently facing a £29 million budget gap next financial year. All councils are required by law to set a balanced budget with expenditure balanced by income, so work will take place over the coming months to close this gap.
There are three main variables which are affecting the council’s finances, and over which the council has little to no control:
- Inflation: Dorset Council, like many households and businesses, is facing the challenge of inflation. Costs are increasing at an unprecedented rate, affecting many services the council provides. For example, rising fuel costs are impacting on transport services, while capital costs for road works and new buildings are affected by infrastructure price rises.
- Employee pay awards: The nationally agreed pay offer for next year alone is anticipated to cost the council an extra £6 million.
- Adult social care: demand continues to grow due to the aging population, and new Government reforms coming in over the next year will cost significant sums to implement.
The report explains that Dorset Council faces a high level of uncertainty over its budget position at this point in the year. It is not known what will happen with inflation over the coming months so budget setting has to be based on sensible forecasts. And the Government’s financial settlement to councils will not be announced until the end of the year.
Cllr Gary Suttle, Portfolio Holder for Finance, Commercial and Capital Strategy, said:
“Once again, we face a challenging budget situation, as do nearly all councils across the country. Dorset Council continues to be under-funded by Government, but this is now exacerbated by inflation. As councillors, we must work hard over the coming months to set a balanced budget. This may require some difficult decisions.
“I’m acutely aware this comes at a time when people are increasingly struggling to make ends meet. Support for people who need it most will be prioritised and we’re continuing to press our MPs and the new Government for a better deal for our taxpayers.”
