County faces prospect of �60 million savings warns finance chief
A SENIOR county council official warned today of a worst case scenario which could see Cambridgeshire facing the possibility of finding up to �60 million in savings over the next four years.
Nick Dawes, corporate director finance, said there still remained many uncertainties over the scale of the cuts but Cambridgeshire needed to be prepared for the Government’s pledge to reduce public spending by a quarter.
“It is unclear from the announcement whether the cuts in spending will be absolute or take into account inflation and demand/demography factors,” says Mr Dawes in a report to tomorrow’s corporate scrutiny committee.
“Taking the simplest view, i.e. that the cuts will be in absolute terms and equally spread over the four years (excluding direct school grant), Cambridgeshire would see a reduction of some �8 million in its general grant and �8 million in specific grants in 2011/12 with further year on year reductions of a similar scale for the following three years.”
Mr Dawe said the county’s plan had for now assumed a cash reduction of �1.1 million a year but keeping all other assumptions equal the council may need to find some �14.9 million more savings in each of the next four years on top of what had already been planned.
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“For reference we are already planning for �22.1 million savings in 2011/12,” he said.
Mr Dawe will present a technical briefing to the committee setting out the local implications of the coalition Government’s Budget including the affects of a freeze on Council Tax.
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Cambridgeshire’s forward plans had assumed a yearly increase of 2.5 per cent – which would have brought in �5.7 million next year. It was too early to say what will happen to this.
However a two year pay freeze on pay would save the council �3 million in the second year, the council already having assumed a pay freeze for the first year.
Mr Dawe said grant announcements will not come until six weeks or so after October’s Government spending review and this will mean Cambridgeshire’s planning “will have to cope with a wide range of possible funding outcomes and prepare priorities and contingency plans on that basis.”
However Mr Dawe’s report is not entirely pessimistic, producing for councillors a plus and minus table of where the county council will benefit from tax based growth, lower interest rates and a pay freeze and says the overall extra sum the council may have to find next year could reduce to �6.3 million.