Stockport’s council’s finance chief has warned that spiralling costs could have a ‘massive’ impact on the council’s next budget.
The authority is already facing a £20m financial black hole, although bosses have identified £10m in cuts to close this. A combination of council tax, reserves and, potentially, further ‘savings proposals’ are set to fill the remaining gap.
The government’s decision not to confirm its 2022/23 ‘funding settlement’ for councils until December 15 - ‘almost the last day’ possible, according to Councillor Tom McGee’ - has already caused bosses a problem.
READ MORE :
But while this delays the council’s financial planning into early next year, it is the spectre of rising inflation which is now the biggest cause of concern.
Coun McGee, cabinet member for resources, told the meeting that, while seemingly small, the predicted 4pc rise equated to a ‘massive amount’ of money.
“The difficult bit - and it’s the bit we do need to think about - is that inflation is starting to grow," the deputy leader said.
“And whilst we have got a contingency in our forward planning, we don’t have contingencies that allow for around 4pc - which is the prediction currently on inflation next year on revenue budgets.”
Coun McGee also warned that inflation in the construction industry was increasing at a much greater rate than the council had planned for.
“We don’t have significant contingencies - we have some - but not for construction inflation - as members will know, that’s increasing [at a] far greater [rate],” he said.
“One of the things we will need to do is look very carefully at all the things we have got in to make sure that we plan carefully and note the implication of that.”
The predicted impact on the council’s revenue budget - which is how it pays for day to day spending - would be worse had the authority not already factored in a ‘contingency already of several million pounds’, Coun McGee said.
But he said that the challenge inflation posed to the council should not be underestimated.
He added: “Four per cent equates to about 10pc of our revenue budget, so it is significant. It may not sound a lot as a percentage, but it is a massive amount of money - of £256m in round terms.
“So we will need to go back and carefully consider that.”
Stockport full council met at the town hall on Thursday night (November 18).
