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The city council's Cabinet will meet on October 27 to consider proposals for consultation on the budget for 2009/10. Key considerations will be: continued investment in front line services, delivering value for money, striving to keep any increase in council tax as low as possible and below the rate of inflation and identifying savings to bridge the budget shortfall which emerges each year as a result of underfunding from central government.
Every year there are increased pressures on the council's finances as income from central government falls in real terms due to below inflation grants. The economic slowdown has left councils across the country having to find more than a billion pound of savings over the next three years to safeguard vital local services and keep council tax down.
Southampton City Council is facing a funding gap of just over £13 million - the difference between what we can raise and what we how much we need to pay for services - and we will be looking at ways to make sure that council tax payers don't have to plug the gap. The deficit is a result of a number of factors, including further increases in fuel and energy prices which have led to a rise in the council's fuel and energy bills over the last two years. The housing market slump has seen developments stall, reducing both regular income from services like land searches and development control and, more significantly, from asset sales and money from developers that fund new investment. The council's total gross spending is around £500 million, with net spending at around £180 million for services paid for out of the general fund, which doesn't include services such as council housing. Extra central government provides a funding top up, which this year is £1.9 million. Although this is an increase of 1.94 per cent it is still below the rate of inflation and falls short of the required £13 million. Nationally, current levels of inflation mean that the value of government funding to councils over the next three years is currently worth almost £500m a year less than originally intended, according to the Local Government Association.
Councillor Jeremy Moulton, Cabinet member for resources and workforce planning, said: "As a council we are working hard to deliver value for money and are constantly looking at how we can improve services against an increasingly difficult backdrop of chronic government underfunding.
"As a new administration we are determined to become more efficient and to keep tax down and have made a commitment to keep any increase in council tax below the rate of inflation and to provide in addition a discount of ten percent on council tax for pensioner households, who are especially struggling in these difficult times.
"We are keen to ensure that residents have the chance to comment on services that the council provides and how much they should cost."
For more information visit Southampton City Council
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