Cornwall Council needs to make up to £70m savings to reach balanced budget
It announced during a cabinet meeting about plans to develop a budget and financial strategy for the next three years
Cornwall Council needs to make savings of between £45m and £70m in order to reach a balanced budget next year. The news came during a cabinet discussion about plans to develop a budget and financial strategy for the next three years.
The meeting on Wednesday heard that planning the 2026/27 budget and a longer financial plan was proving difficult due to Government delays. Cllr Adam Paynter, the Lib Dem / Independent administration’s deputy leader and portfolio holder for resources, said details of the Government’s fairer funding review for local authorities would not be known until late October or early November.
“We also now know that the Chancellor’s budget will be delivered on November 26. This is likely to have an impact on the timing of the local government finance settlement, which is expected towards the end of the year rather than in November as first indicated,” said Cllr Paynter.
“This makes planning for our next budget and financial plan more challenging and it’s likely that the draft budget presented to Cabinet in December will be based on funding assumptions rather than firm allocations. Whilst that leaves us with a great number of uncertainties, there is plenty we can do to prepare.”
He added: “Indications suggest that the council will need to make significant savings and reduce costs in order to reach a balanced three-year budget. Unless there are significant changes to Government proposals we will not see a significant increase in funding.
“There will, however, be increased costs so it is likely that the council will need to make recurrent savings in the region of £45m to £70m in order to reach a balanced budget for next year, 2026-27. That makes it more critical than ever that our funding is directed to where it’s most needed.”
He said the council will work with its partners for better outcomes for Cornwall, focusing on prevention, ensuring services are priced to reflect their true cost, driving efficiency and reviewing the capital programme (the money the council spends on work projects and developments).
Cllr Paynter said that generally there was a good level of performance at the council within very tight budgets. “The exception is the provision of children’s services where Government lack of action has seen demands and costs spiral upwards despite our endeavours to limit those increases.
“In my view it was reckless of Government to signal the introduction of a cap on the profits of non-local authority registered providers of children’s homes without an immediate or swift implementation of the cap. Not surprisingly this has resulted in providers hiking up their costs even more because, like us, they still have no idea if that cap is starting next week, next month, next year or at all.
“That’s the main reason why the council is forecasting an overspend of £3.4 million at the end of Quarter 1. In the continued absence of a cap, those cost pressures are escalating, with a forecast overspend in the Together for Families directorate at the end of July increasing to £7.7m.”
He said the council was currently reviewing where further savings could be made without dipping into reserves and with minimal impact on services.
Cllr Paynter added that the goal of the council’s strategy would be to ensure “visible improvements across Cornwall” whilst ensuring “long term financial sustainability and resilience”.
He said earlier this year that a maximum 4.99 per cent council tax increase is almost inevitable over the next three years.