Council calls on Government for much needed help

PUBLISHED: 22 January 2024

Given the current financial crisis for many councils across the country, Colchester City Council has asked Government ministers for extra support. Urgent action needs to be taken to support our communities and unprecedented cost and demands on Colchester’s key services.

The council has a strong track record of financial management, having saved nearly £16 million, since 2018, from its budget of £26 million. Further savings of £6.262 million are needed over the next three years, which are expected to grow with continued rising costs.

Pointing to exceptional inflationary pressures over the past two years, the council has told ministers that prices have risen by more than 20 percent since March 2021. Meaning, the net cost next year of providing services will increase from £24.7 million to £27.4 million.

Council Tax, however, has been limited to a rise of no more than 2.99% in each of the past two years, and the Government Grant for District Councils has only increased by an average 4.9% in the provisional settlement, which was announced in December 2023.

This means the council’s funding continues to decrease in real terms. At the same time, the council must respond to increasing demand for key services. This year alone, Colchester has seen its temporary accommodation costs (for those facing homelessness) exceed its £500,000 budget by an additional £800,000.

The council has asked for an extra one percent increase in the Government’s grant or for an increase in the Council Tax Referendum limit that caps the increase at 2.99% or £5. Also, for the ability to recover the full cost of all planning applications, greater freedoms to set licensing fees locally, and for help with unprecedented homelessness cost pressures.

The council has also asked local Members of Parliament, Dame Priti Patel DBE MP, Sir Bernard Jenkin MP and Will Quince MP, to raise the need for better funding for local government directly with the Minister leading on the consultation, Simon Hoare MP.

Council Leader, Cllr David King, said: “I thank our MPs for their time and understanding. We know the many pressures on the public purse, but local government across the country is in deep financial trouble, with some councils having declared effective bankruptcy, and others at risk. I have told our MPs that we are not in that position but are deeply concerned that the provisional Local Government Finance Settlement falls well short of what we and others need, and that this will make it even more difficult to keep services running.

“I assured our MPs, as we do residents, that the council will do its bit and more. We will be radical and are robustly addressing our budget gaps. We will look for support from all parties, as we reduce spend by a quarter over the next three years using reserves to enable change and smooth a difficult transition, to ensure we are an efficient, hardworking council, fit for the future, and that will live within our means.”

Page last reviewed: 22 January 2024


Subscribe to receive updates on Council news, events and offers, green living, leisure and sport, museums, committees, jobs and more.