A BUDGET black hole of over £40m for Wiltshire Council’s budget has been predicted for the coming financial year. 

For the current financial year, £412.5m has been budgeted and there is a predicted underspend of £1.8m.

The current budget is being supported by a £20.3m hardship and emergency funding grant from the government. 

The medium term financial strategy predicts a budget gap of £45.5m for the next financial year. And this figure, if not addressed, will rise to £57.8m in 2023/24 and £71.1m by 2024/25. 

But according to a budget review, current estimates put the 2022/23 gap at £40.9m.

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Before Tuesday’s cabinet meeting member for finance Pauline Church said: “Ultimately, tough decisions will need to be made and we are developing a clear strategy on how we will achieve balanced budgets in the future while not sacrificing our aim for the county to emerge as strong as possible from this unprecedented time.

“A significant change since February has been the confirmation of the council’s likely funding from the New Homes Bonus, originally anticipated to reduce by £1m in 2022/23 to £7.1m.

“The reductions in the scheme have been confirmed that Wiltshire will receive £2.4m in 2022/23 – a £5.7m reduction and a £4.7m shift from the previous position.”

Cllr Church said that even before Covid-19 hit, the council was forecasting a budget gap of £24m rising to £38m in 2022/23.

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“With the onset of the pandemic we have no alternative but to focus on and put all our resources into keeping services going for Wiltshire residents and businesses rather than adopt plans to bridge the budget gap,” she told the cabinet. 

As a result the level of savings during the pandemic period was smaller than the original £24m expected with only £2.6m being delivered. 

“This meant that the government effectively, supported the council to the tune of £20.3m, as well as using our own reserves of £8.4m.

“The budget was set at the height of the pandemic and the current 2021/22 forecast suggests there is potential flex in those estimates.”

The government is currently working on its comprehensive spending review which will dictate going forward how it funds local government – due out late this year. 

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“We cannot rely on government support alone, and rationalisation of earmarked reserves will take place to ensure spending in those areas continues to be relevant and in the best interests of Wiltshire communities,” Cllr Church added. 

“Through our stringent planning and reporting we will continue to be transparent so that as a council we can all work together to ensure the communities of Wiltshire continue to be provided for with high quality services, despite the challenges we face.” 

In its budget the council set out a plan to bolster the future general reserves to cover the financial risks the local authority faced. At the end of the year the reserves are expected to be held and will be able to help with the forecast gap or specific issues for the coming financial year. 

Watch Wiltshire Council's cabinet discuss the financial situation here.