Councillors in Bradford are set to receive a crucial update next week on the Council’s financial status for the 2023-24 fiscal year, outlining the extraordinary scale of challenges it confronts.
The report will shed light on the ongoing measures taken to tackle existing financial hurdles and the pressing need for additional actions to ensure a sustainable financial standing. Exceptional Financial Support has been sought from the Government, a lifeline that, if approved, would manifest as a capitalisation directive allowing the Council to borrow funds for revenue expenditure. The application for the 2023-24 fiscal year stands at £80 million, surpassing the initial estimate by approximately £22 million. This reflects the Council’s imperative to uphold reserves amid exceptionally trying financial conditions, exacerbated by the relentless pressures of children’s social care, adult social care, and inflation.
Looking ahead to 2024-25, the Council has submitted an application for £140 million, a vital component to establishing a balanced budget and financing the proposed changes aimed at ensuring the Council’s long-term financial viability.
The financial strain is unprecedented, primarily driven by continual spikes in demand and cost pressures related to Children’s and Adult Social Care. The projected spending on these services for the current year accounts for a staggering 87% of the agreed budget for 23/24.
Since 2011, Bradford Council has been compelled to make cuts and savings exceeding £350 million due to national austerity measures, inflation, and heightened demand. Recent spikes in inflation and energy prices have further strained budgets for local authorities across the board.
To achieve overall financial sustainability, the Council must make substantial changes and savings. This involves bolstering reserves to an appropriate level, divesting assets, reviewing and scaling down the capital program, enhancing service efficiency, and evaluating the provision levels, accompanied by a comprehensive review of all Council functions, including potential increases in fees and charges.
Cllr Susan Hinchcliffe, Leader of Bradford Council, said: “We have been clear that the council’s finances, like many others across the country, are really challenged due to social care costs. We have asked Government to invest more particularly in Children’s Social Care nationally. The latest announcement from Government seems to acknowledge the extreme cost pressures of social care that councils are facing but the funding has not come through from Government to reflect that need. We think this announcement will mean just another £5 million for Bradford and for one year only. This is far lower than councils require to fund the rising levels of social need.
“Exceptional Financial Support is therefore the only route open to councils and that’s what we are negotiating now with Government. The Children’s Trust are telling us they need £244 million to run children’s services this year, yet we only raise £233 million in council tax. It’s no good just plugging the financial gap though. The Government want to see councils become smaller and employ fewer people. Ironically, to make the Council smaller and more financially sustainable we have to spend more in the short term. That means spending more on digital technology for example. At the same time, we are being forced to look at all the services that we provide and make extremely difficult decisions about what we can continue. Inevitably these will have an impact on our residents. We have tasked officers with working on a five-year plan to move to a more sustainable financial position and we will share this as it is developed.”
The Council’s Quarter 3 Finance Position Statement for 2023-24 is slated to be presented to Bradford Council’s Executive on Tuesday, 6 February.