Notts County Council still planning ‘no cuts budget’ despite being ‘worse off’ in new financial year

Following national announcements by Labour Chancellor Rachel Reeves’ in October 2024, the County Council said it is facing a £31 million in additional costs in social care due to the increased minimum wage and employers’ National Insurance contributions.

Coun Richard Jackson (Con), council cabinet member for finance, told the Local Democracy Reporting Service on Monday, January 6, the level of the Government’s yearly financial settlement – the annual grant it gives to councils towards running services – was not “unexpected”.

However he says the council is still “worse off” due to additional costs from the budget not being offset by the settlement.

He added: “It’s still provisional, any additional money doesn’t offset the costs of the Autumn budget- that’s before we look at inflation and extra demand on our services.”

The council was given £277.1 million for the current financial year, increasing by £19.3 million to £296.4 million for the next financial year beginning April 2025.

This increase includes a grant of £2.9m to help meet rising costs in children’s services.

Coun Jackson said that the council will continue in its approach of “a no cuts budget” and is “confident [the council] can maintain services and still balance the budget”.

Councils facing increased costs and demands on vital services have to either reduce their services or find money from elsewhere to balance any financial burden- one way is to increase council tax.

He said: “We’re aware of the cost of living, keeping the council tax as low as possible. We’ll do everything we can to keep an increase to a minimum.

“It’s also clear from the Autumn Statement the Chancellor expects councils to increase council tax by five per cent- it certainly won’t go above that.”

In the settlement on December 18 the Government said it would be increasing councils’ core spending power by 3.5 per cent over the previous year.

This stems from the government’s settlement announcement to provide £69 billion for councils across the country- this includes a new emergency £600 million Recovery Grant to support the most in-need councils.

Coun Jackson said: “Where it’s helping failing councils elsewhere, it’s doing so at the cost of everywhere else- they just divide the cake up differently.

“On [increased] spending power, it’s a euphemism, it looks like it’s additional money they’re giving us- it’s not- they’ve increased the amount in which we can increase council tax.”

Despite this, Coun Jackson says the council is “in a better financial position than similar authorities”.

He added that the authority is working towards saving costs in response to the additional costs put on councils.

He said: “It’s about changing the way we work, working more efficiently.

“It means things like moving out of County Hall, a huge expensive building to maintain, investing in new technology and investing in prevention to reduce demand on those expensive services in social care.”

However further details on exactly how the council will deal with its increased costs and how it will bridge its funding gap are currently unclear.

He added: “We will always welcome more money and in the long run, fairer funding- we still believe that we are, and other East Midlands councils are, underfunded compared to others.”

Councillors from opposition parties expressed scepticism towards Coun Jackson’s comments.

Coun Francis Purdue-Horan, Finance Spokesperson for the Nottinghamshire County Independent Group said: “There is no such thing as a ‘no-cuts’ budget – everyone knows that Nottinghamshire County Council, like many other councils are drowning in debt and that any difficult decisions will be made after the County Council elections in May.

“Any budget increase will simply be swallowed up by Labour’s increases to employer’s National Insurance.

“It’s imperative that any budget puts resident’s first and deals with their priorities like finally getting to grips with broken roads and pavements.”

Coun Jim Creamer, Labour Spokesperson for finance, siad: “We’ve had at least three conflicting announcements from the Tories regarding council finances in the last year, so it’s difficult to take Coun Jackson at his word on this.

“What we do know is that the new Labour government has increased council core spending power by 3.5 per cent, which has provided the funding for this ‘no cuts’ budget.”

The Treasury was contacted for comment.