Lancashire County Council claim there is a “generally positive outlook” for their finances, despite some uncertainty due to the ongoing Covid-19 pandemic, according to a new report.
The 'Money Matters' report to be considered by the council's cabinet on Thursday 14th January provides an update on the council's current financial position, as well as a medium term forecast for the next three years.
It outlines that the council's finances remain in a strong position and, based on the current forecast, there are sufficient reserves to support the revenue budget gap through to and including 2023/24, the end of the council's current Medium Term Financial Strategy.
County Councillor Geoff Driver CBE, leader of the county council, said: "Careful management of the council's finances over recent years had put us in a much better position by the start of last year, particularly compared with 2017 when we faced a deficit of £200m and expected to already be relying heavily on reserves.
"The pandemic which we've faced since shows just how important it is to be on a solid footing and have the financial resilience to be able to cope with the unexpected.
"Whilst Covid-19 has thrown up many challenges, I'm glad to be able to report that we're still in a strong position and able to continue to invest in important council services for the benefit of people in Lancashire."
But the council is aware that there are still financial challenges ahead.
Based on the most-likely funding scenario, the county council's funding gap is expected to be around £54m by 2023/24, though this is a significant reduction of £25m from the previous forecast gap of £79m.
While the council has had to divert resources to responding to the emergency pandemic, progress is now due to resume on identifying ways of meeting the future funding gap via additional savings and improved ways of working.
County Councillor Driver added: "Like every other local authority we face continued pressures on our budget, and this is expected to continue, with the pandemic expected to add to ongoing demand in some areas such as children's social care.
"As the report outlines, the pandemic also meant the government's multi-year spending review was delayed, and last year's funding settlement covered just one year. This and other demographic factors mean that, while we have based the forecast on the best available information, there remains a great deal of uncertainty about the future.
"The work to deliver savings has had to be delayed while we have focused on responding to the pandemic, but this will again become our focus as the county recovers in order that we can continue to maintain a strong financial footing and deliver our priority to protect the services our most vulnerable residents rely upon."
In the government's provisional funding settlement, it was confirmed that the maximum increase that can be applied to council tax, without a referendum, will be 1.99%. The Chancellor also announced that councils will have the ability to raise council tax by an additional 3% specifically to fund increasing demands on adult social care due to the UK's ageing population, to be levied entirely in 2021/22 or spread over the next 2 years.
The scale of savings agreed to be delivered by the council over future financial years remains significant with around £25m currently forecast to be delayed in 2020/21 as a result of refocussing officer priorities to the response to the current pandemic. In addition there are additional savings of around £24m to be delivered across 2021/22 and 2022/23.