Estimated £1.5million cash boost for Central Bedfordshire Council thanks to government

The outline funding details from the government for 2025/26 were published on Wednesday (December 18).

Writing to fellow councillors, Independent Aspley and Woburn councillor John Baker explained: “It’s not a complete settlement, as a number of grants are allocated outside of this funding plan.

“So this update should be treated as an interim position. The treatment of the National Insurance increase and the allocation of funding won’t be confirmed until the final settlement, which is expected on or around February 5, 2025.

“Officers in (CBC) finance have determined that the settlement improves the budget position by £1.5m, as it currently stands. But this figure should be treated with much caution because the government’s hike on employers’ National Insurance, or the ‘jobs tax’, will cost the council about £3.4m a year.

“While there’s an expectation that at least some of the £3.4m will be offset by the government in its final settlement, clearly the amount needs to be £1.9m in order for the council to be no worse off.

“There’s a separate grant towards highways capital schemes, which increases expected funding by £2.57m (with strings attached). I’ve agreed with the chief executive’s recommendation that this funding can be used to reduce the overall spend on the capital programme.

“This would reduce pressure on the revenue budget by about £140,000,” added CBC’s finance portfolio holder councillor Baker. “To be clear, the capital programme will include borrowing of around £25m to spend on highways projects, above and beyond government funding over the next four years.

“This would be in line with continuing to meet the expectations of councillors. We also expect a reduction in the household support fund of almost £300,000 in 2025/26.”

Councillor Baker said in a separate statement to the local democracy reporting service: “This Independent administration remains cautious about the financial challenges that face the council.

“We’ve received an initial financial settlement from the government, but this doesn’t compensate for the extra costs incurred by local authorities because of the increased National Insurance obligations.

“The fact that we won’t know the final financial settlement until early February makes it harder for local authorities to complete the detailed plans needed, ahead of approving a budget in February.

“We’ll continue to act prudently, managing public money carefully and ensuring we deliver high quality services for the residents who fund us through their council tax.”

A report to a joint budget scrutiny task force meeting earlier this week warned that more than 130 jobs could be lost at CBC in a bid to balance next year’s budget and reshape the local authority.

Around a third of those posts are currently vacant. The local authority has more than 3,000 staff. Reducing this figure would cut costs by £13.3m, suggested the report. The council has been holding staff vacancies already.