Coventry City Council warns of threat from high inflation - The Coventry Observer

16th Aug, 2022

Coventry City Council warns of threat from high inflation

COVENTRY City Council says it will report on a balanced revenue and capital outturn for its 2021/22 but warned inflation, energy prices and other factors will pile pressure on its funds for future years.

Councillors will consider the report – which will summarise the previous year’s budget, spending on services and capital schemes – at the latest cabinet meeting on Tuesday, July 12.

The crucial aim for councillors is to continue to deliver frontline services and maintain progress on capital projects.

Coun Richard Brown, Cabinet Member responsible for finance, said: “We have once again balanced our final year spending, but we must continue to manage our finances especially through these very uncertain months ahead.

“Councils across the country are facing financial pressures because of soaring energy prices, record inflation levels and increases in the National Living Wage, but the Council has managed with its finances so far.”

The authority’s original budget was £243.8million and, despite a final spend of £252.8million, the local authority was able to manage the additional expenditure caused by Covid using nearly £9million of Covid funding provided by the government.

At the same time between 2021 and 2022, the council spent £189.5million on major capital schemes, include public realm redevelopment and the remodelled Coventry Railway Station.

Among the steps taken to manage its revenue spending the council achieved a £2.5million underspend on its housing and homeless budget as a result of significant efforts to improve quality and reduce the cost of providing temporary accommodation.

Overspends where identified in Children’s Services of £2.4million and there were costs of £2.5million to manage the ongoing bin lorry drivers’ dispute.

Coun Brown said: “Overall this is a really pleasing outturn report especially after two years marked by significant disruption and additional costs incurred as a result of Covid-19, coming on top of 12 years of austerity budget cuts to core spending.

“As a council and with the diligent efforts of officers we have managed local funds prudently, targeting support at the areas that most need it and taking care not to commit resources in an unsustainable way.”

He vowed the council would do all it could to maintain frontline services but added it was becoming more challenging.

And he said reserves needed to managed carefully because of the volatility in the national and international economy.

The council said, going forward, it would be able to draw on a robust financial position but, even with some provision for inflation, the starting position for this year’s funding – 2022/23 – was a gap of £17million and inflation could increase.

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