Northumberland County Council could cash in on energy crisis amid 'significant financial uncertainty'

By James Harrison

County bosses could cash in on the energy crisis to balance the books due to the “significant financial uncertainty” heading into 2022.

Increases to council tax bills and charges for other local authority services are on the cards for Northumberland in 2022/23.

Currently, bosses expect much of the extra cash raised to go towards plugging a gap caused by rising inflation.

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But they have also suggested a winter surge in the cost of heating and electricity could present an opportunity from waste collections.

“We’ve taken fairly prudent assumptions about inflation [but] when you add up the additional revenue raised through council tax [it] leaves little scope for investing in services,” said Jan Willis, the Northumberland County Council’s interim executive director of finance.

“In the short term, we’ve been able to use reserves to cushion the impact of the hyper-inflation, but longer term I can’t give any assurances because it’s still unclear what the system will be that we will be working within.”

She added: “There’s a very large number for the income from the sale of energy generated at waste plants.

“That’s an example of where we’ve benefitted from the increased utility prices, because we can sell that energy at a much higher price than expected.”

According to local authority, 90,000 tonnes of non-recycled waste from Northumberland households is sent to Energy from Waste (EfW) sites every year.

Bosses at NCC are currently finalising spending plans for the next financial year, with the coronavirus pandemic, inflation and energy costs among the key issues facing decision makers.

As well as utility bills, construction costs are also contributing to a “hyper inflation” situation, which it has been warned could affect major projects planned for the county.

The impact of this has already been seen, with delays to proposals for two new children’s homes in the county meaning the cash allocated will “probably now just cover one and a half homes”.

However, the latest predictions are that day to day services will be largely unaffected, for the time being at least.

“There’s significant uncertainty about the [council’s] financial position,” Willis told the council’s Corporate Services and Economic Growth Overview and Scrutiny Committee.

“We’ve had the Comprehensive Spending Review (CSR), but we don’t know how that will [affect government funding] and we know local government financial reform has been put on the back burner again.

“It makes longer term financial planning very difficult, but we’re also still dealing with the impact of the pandemic and it’s unclear how long it will take these effects on the budget to work through the system.”

She added: “We’re in a healthy position in terms of reserves available to help us absorb short term pressures related to the pandemic, but there’s still uncertainty about the longer term effects.”

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