A council tax increase of 5% is likely for Isle of Wight residents but it still won’t be enough for the council to cover a £22million funding gap.
Inflationary pressures continue to rise and, facing what it terms a lack of government funding, the Isle of Wight Council is trying to set its budget for the next year.
A stark account of the council’s finances was given on Monday to the audit committee by the financial director, Chris Ward. He explained at the start of the financial year, the authority was only expected to find £2million in savings, as part of a multi-year effort to bring its expenditure down by £6million.
However, with a ‘significantly different’ financial landscape, the cost pressures to the authority were a lot higher than first anticipated with a £2.9million COVID-19 ‘hangover’ relating to social care and leisure facilities; a high pay award for staff and energy costs more than tripling.
Although officers are at an early stage of preparing the budget, if nothing were to change, the authority would have to find £22million. The unplanned pressures equate to £20million, of which more than £9million relates to adult social care packages and provider care fees.
Inflation in core contracts, including the Highways PFI and waste disposal, amount to a further £2.1million while energy costs have risen by £1.8million. While costs have risen for placements of looked-after children, demand has also increased by 30%, Mr Ward said, so another £1.4million was needed.
The government’s autumn statement allows local authorities to increase council tax by 5% — with 2% going towards adult social care. However, on the Island, a 1% increase in council tax equates to just over £900,000.
Mr Ward said he thought the council had no other option but to increase the tax by the full 5%. The council expects to receive a £6million increase in funding from the government towards adult social care but the rest of government funding will remain the same.
Mr Ward said, if inflation remains at its current level, it is actually a real-term cut to the funding of 10%. Using the COVID-19 relief fund set up a couple of years ago, it would take the gap down to £9million but there is still a ‘significant way’ to go.
Mr Ward said while another £1million is expected to come from government, the authority needs to continue pressing for an increase. He advised the council it should not be making any new policy decisions that would increase the financial burden.
Reserves have to remain at £7million otherwise the council could face intervention from government. In the next few weeks, officers will be working out a plan.
The council’s final budget will be approved in February by the members.
What more do we get for our 5%?!?
We don’t get anymore; in fact, we are likely to get a lot less in both services and money in your pocket. Sad but unfortunately very true.
Mi grunts living on us, in London.
There wouldn’t be a funding gap if council stopped wasting money. They cut cheap beneficial services and then have to pay 10x more. Look after staff and stop bullying and working some to death, then wouldn’t need to pay very expensive agency workers in Social Care etc. Stop funding Amey and run waste services within IWC like always used to, externalising services is more expensive and only making CEOs and share holders rich. Do away with County Hall ( managed without during Covid,). £360,000 legal expenses floating CV bridge and got nothing back -,why not use in house legal. Use people on community service for cleaners etc in public buildings eg toilets instead of get rich private companies who are stealing c/tax money.
And not to mention the Highways PFI, the council was awarded 356m to enhance our roads etc, Island roads should be held to contract and not waste money, classic example repainted parking bays on Ryde Esplanade to just dig em up 3 weeks later…as the money for Island Roads has come from Gov we shouldnt have to pay anymore towards it …at least not until 2038 when the contract runs out
I agree with most of what you’ve said but is it ok to sack the cleaners, bring them back in house not work for companies
Well what a Surprise!!!!!!
No one could have anticipated a rise in our council tax !!!!!!!!
As you say with rising costs , we’ll let me just say this is another nail in our coffin , we the cash cow’s earn what we earn and it isn’t elastic !!!
How on earth do you expect people to live ?????
Why don’t you stop wasting our money on the air con computer system, electric cars pension pot’s, floating bridge the jenny when floating bridge is out of operation , the new heating system and led lighting you are planning on getting ….
But hey we never expected anything less from a bunch of numptys…..
The council always blame funding but how much is wasted due to incompetence by the council.
They are over staffed high wages, huge pension and perk after perk.
It may be time to let the island go into special measures and let people who are qualified to run a council have a go.
We will probably pay 3% more for there pension and pay rises,2% on social care. ,can’t be honest with us tax payers money anyway
Over spend in Covid?, No heating bills for council buildings,no mileage claims for staff working at home. Who agreed to buy so much PPE that filled Medina leisure center , but wasn’t available to staff and deprived those that needed in care homes etc as none left for them ( Council told us not to bulk buy toilet roll but ok for them to use our money and buy PPE) and is now being disposed of as out of date,was it £7 million?.
Cost for adult social care ? When did they increase what they pay care homes?, They make families pay top ups or sell family homes and make next of kin homeless.
Wait a minute. I thought we had a massive supply shortage in social care. Imagine what the council’s finances would look like if they offered an adequate service. Bankrupt.
We just can’t do any more there is no budget left for increases householders are cutting back to cope ,so should the council things need looking at if some services need to be reduced so be it.
house holders have reduced gas and electric as got no choice the weekly shop has been reduced , the population of this country are being very hard hit indeed .
shops will close as no one spending in them
unemployment will certainly increase
more crime to fund things
health issues both mental and physical
house repossession etc etc
I bet the council workers has had nice pay increases especially the ones who were on a fortune already
There is going to be uproar on the streets soon all over the country I can see it sticking out a mile .
don’t lie council….you will come up with any pathetic excuse to steal from hard working taxpayers, to handout to yourselves and spongers.
This bunch of Tories are destroying people with their increases.
Not Tories. It’s an Alliance that has no interest in the majority. Lots of secrets and budgets out of control. Yet still going to give even more money to spongers.
You need to look more closely. The Tories may the have won the last election, but without an overall majority the others ganged up on them and the council is run by the Independents. (You know, the people responsible for this current non floating bridge. And now covering up the settlement and not giving any hint of a solution). I
I am not a fan of the Tories, but the alternatives are a whole heap worse!
They need cut the pay of the high earners in the council. Some of that money could go to the front line services where they are needed.
Ooh no can’t do that poor soul’s!!!
They have already given an extra £6000 to miss big at the council before she even sat down with her coffee and biscuits!!!
Can’t have them struggling on their massive wages, how else would they pay for the gigantic cost in living ?????????
Ooh and not forgetting the rise in council tax!@iow County Council numpty office !…..
This needs to be taken to high court. And now it’s 5% the people can take this to the scrutiny committee
The comments below say it all – just hope the Councillors read this they may then really understand how the residents of the Island feel about the financial situation we are in.