Ashfield Council facing 'cost-of-living emergency' in face of soaring costs

The council is projecting a £3 million funding gap in the next financial year, despite raising council tax by the maximum amount allowed earlier this year.

It says the situation has worsened by £1m as rising inflationary pressures and a projected surge in council wages were confirmed this month.

It has led to Coun Jason Zadrozny, council leader, warning the authority is ‘running out of options’ when it comes to clawing back cash.

He says all the ‘easy options’, where the council can make small adjustments to its budgets, have already been taken, leaving the authority with an ‘impossible challenge’, unless Whitehall funding models change.

He told the latest council cabinet meeting that the authority’s revenue support grant has been slashed from £15m to about £104,000 over the past decade – totalling about £50m in lost income.

But he said the authority has continued to provide the same services, leaving it in a position where it is struggling to find extra cash without ‘significantly reducing’ its offer to residents.

Coun Zadrozny said: “We’re one of the only councils still running, for example, a 100 per cent council tax support scheme for residents and these are the things that are going to have to fall.

“We’re trying to protect people as much as we can, but there are no more easy options, there’s no financial padding in the council.

“We’re getting close to having a cost-of-living emergency within the council, to only doing discretionary services like emptying the bins and burying people.”

Councils must set balanced three-year budgets annually, to prove they will not fall into financial ruin in the future.

However, this is dependent on how much grant support they receive from the Government each year.

Currently, the authority does not expect to receive guidance on its 2023/24 grant support until December, with Peter Hudson, council corporate finance manager, warning there is ‘a lot of uncertainty’.

He said: “We have huge challenges going forwards and what we don’t know is whether Government is going to provide any additional funding.

“We’re not likely to find that out until December, so there’s likely to be a lot of uncertainty at the moment.”

The council moved to reassure residents that its finances were ‘in very good order’ earlier this year, after Lee Anderson, Ashfield MP, claimed the authority was facing a ‘disastrous mess’ with debts nearing £100m.