Financial resilience needed in Surrey, as funding gap deepens

The Chartered Institute of Public Finance and Accountancy (CIPFA) has warned that Surrey County Council's £36 million funding gap could rise to £94 million by 2021.

Commissioned by the council to look into its financial situation, CIPFA’s report finds that the funding gap of £36 million in 2018-19, could rise to £86 million by March 2020 and to £94 million by March 2021. Additionally, Surrey's gross expenditure was expected to increase by 6.5 per cent over four years, but funding would rise by only 2.4 per cent over the same period.

If the predictions are correct and if the council does not take necessary precautions, the council will not have sufficient reserves to meet its expected budget gap in 2019-20.

The warning follows Somerset County Council agreeing major cuts to balance its books, after Northamptonshire’s much publicised financial issues.

David Hodge, leader of Surrey County Council, said of the report: “It’s well known that local government budgets across the country are under severe pressure. However we have a duty to ensure the council remains as financially sound as possible in these unprecedented times and that’s why we asked CIPFA to do this review.

“While we have achieved a balanced budget or small underspend in the past eight years we actively wanted our financial situation to be independently challenged. We know there is much more to do to make our finances sustainable and able to withstand the huge pressures in adult and children’s services that we’ll continue to face into the future.

“But with a new senior team leading the council, including an interim director of finance, we’re taking all the right steps to achieve this. That includes the work to transform services around residents’ needs, bolstering skills and capacity in the finance team and a review of our Orbis partnership looking at how things can be done better. It’s critical that we discharge our responsibility to our residents and ensure every penny of their council tax is spent as effectively as possible.”