Inherited Deficit Reduction Plan


Borough Partnership: Inherited Deficit Reduction Plan (IDRP)
Key Points
• The first priority of the Borough Partnership (BP) is Safeguarding the Council’s finances. 
• The previous Conservative administration left TWBC with a deficit of £944k in FY 22/23, and £2.6m in FY 23/24.
• UK inflation is currently running at 9.1%; TWBC costs are up 10%; TWBC energy costs are up 100%.
• This is unsustainable and so the Borough Partnership is reviewing the Council’s finances.
• At present there are no plans to cut services.
• However, there will be increases in certain charges (details below). 
• All increases in charges are below the cumulative UK inflation rate: they represent a real terms decrease in council charges.
 
What is the Inherited Deficit Reduction Plan?
• The previous Conservative administration left TWBC with a deficit of £944k in FY 22/23, and £2.6m in FY 23/24.
• This deficit accelerates and will total £20m by 2028 if not tackled, making the council unviable. 
• The Council’s financial situation is also severely exacerbated by UK inflation—currently running at 9.1% annually. Council general costs are already up 10%; and energy costs up by 100%. This is affecting all UK local councils. 
• Therefore, the BP needs to make difficult but responsible choices to protect the Council’s services.
How are the Borough Partnership carrying out the IDRP?
• Over Summer 2022, Cllr Andy Hickey and the Finance team will be reviewing the council’s revenue and costs to determine where adjustments can be made; this will then be presented to the Cabinet for decisions. 
• There are no plans to cut services.
• But the BP Cabinet is considering which charges can be increased starting from 1st October 2022. These will include:
o Car park hourly tariffs – 12%*
o Off-street season tickets – 6%*
o On-street residents’ permits – 12.5% 
o Visitor voucher charges – 11.9%*
o Parking charges at Dunorlan – previously there were no parking charges; now it is £1/hr
o Garden waste charge – 8%
o Cremation fees – 3%
• It is important to note that the last time the Council put up parking charges was 2017. The compound rate of inflation since 2017 has been 16.39% (to April 2022). Therefore all of these increases in charges (less Dunorlan) are below the UK rate of inflation and so represent a real terms decease in council charges. 
• In January 2023, a new budget will be presented to full council for approval. This will look at the Council’s finances in the round and will aim to balance the Council’s books (i.e. remove the deficit) over a reasonable timeframe (to be determined during the preparation of the budget). 
* Increase in Council revenue; some charges will go up more or less than this figure.

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