Knowsley Council's budget for last year was squeezed by £5m due to inflation.
A council report set to be discussed at a cabinet meeting to be held on Wednesday has revealed the extent of inflation on the council's spending last year.
According to the report, the council has had to use £1.65m set aside to deal with the costs of inflation in order to ensure a balanced budget. The figure was less than anticipated and less than the £5m in inflationary pressures due to surpluses elsewhere in the council's budgets.
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Key pressures have included additional costs due to increased demand and complexity for placements for looked after children, as well as more spending on home to school transport provision.
A deficit in the cost of school meals was also identified as adding pressure to the council's budget, with this being put down to inflation and "increased meal numbers" which has been exacerbated by a reduction in government funding for children eligible for free school meals.
The report also details the pressures brought about by difficulties in recruiting council staff, particularly in adult social care and children's services, which has led to an extra reliance on agency staff, driving up expenditure.
In terms of the inflationary pressures on the council, this has included increased costs for staff following an average nearly 5% pay increase for council workers as well as higher costs for fuel gas and electricity, adding £1m to the council's budget.
Another cost which added to the pressure on the council's budget was £1.4m that was set aside towards the council's leisure company Volair, in order to prevent it from going bust.
The council report states that while it is working with the company to ensure it "continues to manage its expenditure robustly" there has been another £2.5m set aside to fund a "similar potential requirement" over the next year.
Before taking into account the pressures of inflation, the council achieved a surplus of just over £1m, coming from health and social care, regeneration and resources, a situation the report credits to "tight financial discipline" over council budgets.
However, due to the additional costs brought to bear on council budgets due to inflation, this surplus was wiped out, with the council required to dig into reserves set aside to manage extra costs in order to make sure the council covered its costs.
The report notes that over the next year there remains "considerable uncertainty" over what impact inflation will have on the council's coffers, which already faces a £1.3m shortfall, being funded for resources set aside for budget pressures with the position to be "monitored closely" as the year unfolds.
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