Like many local authorities, the city council is battling against unprecedented pressures of steep increases in its operating costs, increasing demand for services, and below inflation funding from the Government.

Council funding has already decreased by approximately 40% since 2008/9 and in that time many difficult decisions have already been made.

In the next financial year alone it's expected that the deficit will be around £1.7million, and will only increase year on year if not action is taken.

While we will be able to make some savings through working more efficiently and effectively, these will not balance the books by themselves. Inevitably we will have to reduce or stop some services and many others will be done differently.

A decision on council tax hasn't yet been made but if we don't increase it then we will have to find more savings, impacting on our ability to deliver services.

The Government’s referendum criteria which limits increases in the council’s element of council tax currently remains unchanged at 3% or £5, whichever is greater. For the purposes of forecasting, it has been assumed that the council will increase council tax by 2.99%, the maximum allowed before triggering a referendum, in each of the next three years.

Although Council Tax is collected by the city council, we only keep a small proportion (12%) of the overall amount. The largest share goes to Lancashire County Council (73%) with the Police and Crime Commissioner (11%) and Fire Authority (4%) making up the remaining.  If you live in an area with a town or parish council then they will also take a share of the council tax you pay.

Councils are required to keep an appropriate level of money in general reserves to cover unexpected costs.

The savings we have to make are recurring, which means they have to be made every year.  Although we may be able to dip into our savings to reduce some of the savings we have to make in one go, we still have to make the savings in future years in any event.

First and foremost, it’s important to recognise that we will continue to deliver a wide range of services to the public and will be focusing on those from which most people benefit.

But unless we cutback in some areas we just won’t be able to afford to fund vital frontline services.

The council has agreed four key priorities and these are defined by key outcomes, many of which are contributed to by the council’s statutory services such as waste collection, recycling, street cleansing, planning, public protection, revenues and benefits.

We also work with other organisations and partners to achieve the outcomes as the council can’t do everything by itself.

Whilst some of the proposals mean the council will deliver less of some services, it’s also intended that some outcomes are either delivered differently or through our partners and other organisations.

A number of workshops have already been held between Cabinet and Senior Leadership Team to explore initial proposals and these will be ongoing throughout the budget process.

This is an ongoing and significant piece of work and will continue to have a particularly important part to play in driving down budget gaps from 2024/25 to achieve a position of financial sustainability.

In 2023/24 we did just that and restructured our senior leadership to cut management costs and save around £448,000.

We’ve already relocated staff from Palatine Hall into Lancaster Town Hall to save costs associated with heat, lighting etc. Palatine Hall has now been leased out to provide an income for the ocuncil.

Fees and charges provide a significant income to the council and they help to recoup costs and fund other services.

Raising fees and charges is one area which have been looked at along with every other service that we provide, with increases made where it is reasonable to do so.

We have to maintain a balance between making sure we can cover our costs and provide an income to the council, but at the same time making sure our services are affordable. 

If prices are too high then footfall would decrease, but if they are too low then we don’t recoup the costs of provision.

Where there are staffing implications relating to specific proposals, the council will work with staff and Trade Unions from an early stage, to try to mitigate compulsory redundancies where possible and consider alternatives to redundancy such as redeployment. Other options will include voluntary redundancy.

Affected staff will be provided with a wide range of support to help them to find new opportunities, either within or outside of the council.

In the meantime, we won’t be recruiting to most vacant posts, unless there’s an urgent need to do so.

The Government allocates specific funding streams which local authorities can bid into and we worked with partners to bid for £50million from the Levelling Up Fund Round 2 to support Eden Project North.

Once delivered, this project will obviously have direct benefits but also help deliver many of the agreed outcomes for the district.

The council has also been successful at bidding for Government funding for a series of decarbonisation projects. These have helped reduce CO2 emissions and also meant we’ve not been as badly hit by energy prices rises as we would have been, reducing the amount we need to save elsewhere.

The council recently awarded eight grants to different projects in the district from a share of £5.3million provided by the UK Shared Prosperity Fund (UKSPF). This fund is allocated by central Government to replace some EU funding that was previously provided. The investment plan we have agreed with Government will ensure that the external funding is allocated in a way that delivers the agreed outcomes for the district.

The council collaborates on a daily basis with a wide range of partners. These include the universities, Lancashire County Council, town and parish Councils, Lancaster Chamber, BIDs, Lancaster and Morecambe College, the arts sector, CVS, voluntary organisations, NHS, police, fire and rescue, etc. By doing so we are working to ensure that as individual organisations we are delivering a sum greater than the parts.

Examples of this include Eden Project, funding of arts and culture, UKSPF investment plan, and funding of the voluntary sector.