Council welcomes Government support

Peterborough City Council has welcomed today’s (Wednesday 10th February) announcement from the Ministry of Housing, Communities and Local Government (MHCLG) that its request for exceptional financial support has been accepted.

Following discussions between the council and MHCLG over a number of months regarding potential solutions to Peterborough’s budget challenge for 2021/22, MHCLG has today confirmed that it is offering the council an additional £4.8m to support with this current year’s Covid-19 related costs, and up to £20m for 2021/22 through the awarding of a Capitalisation Direction. This allows the council to borrow in order to fund revenue costs, closing the gap between Covid-19 costs and income in 2020/21 and enabling the council to set a legal balanced budget in 2021/22. MHCLG will be working with the council to confirm the final amounts in both years.

Councillor John Holdich, Leader of Peterborough City Council, said: “We are delighted with the positive response we have received from MHCLG to our request for exceptional financial support. In allowing us a Capitalisation Direction, they are acknowledging that the council has done everything it can to deliver much-needed services efficiently. This includes the implementation of a financial recovery programme and an extensive review of our services and contracts to ensure they are achieving best value.

“It’s clear that they understand Peterborough’s unique challenges and have trust in our assessment of our position and our ability to run an effective council.”

Councillor David Seaton, the city council’s cabinet member for finance, added: “We can now put forward a balanced budget, and in addition this gives us a solid basis on which to continue discussions with Government on its plans for future funding for the sector.  That is the key to truly sustainable funding for our ambitious and forward-thinking city.”

For the past decade, the council has been operating within an extremely challenging financial position, with funding that the council receives from Government to provide services (Revenue Support Grant) and from sources such as council tax and business rates now insufficient to meet the demand for services from a growing city of now more than 202,000 residents.

The council has balanced its budget each year by improving commercial income, making increasing levels of savings, driving down costs and taking advice and challenge from external experts. However, for 2021/22, the budget setting process has faced an increased challenge with ambitious savings and transformation plans agreed for the current year, unable to be implemented due to the unprecedented strain put on the council by the Covid-19 pandemic.

With the support outlined today by MHCLG and other proposals set to be published on Friday (12th February) as part of the council’s Phase Two budget papers, members will be able to vote on options for a balanced budget in 2021/22 at the council’s budget setting Full Council meeting on Wednesday 3rd March.

“It’s important to recognise that this is an offer of support, not an intervention as has happened in other councils where the Government has felt they don’t have a firm grip of their financial situation. In our case, it has been accepted that we have done what we can – but the growth of the city and the needs of our population have outstripped the amount of money currently available to us.” Councillor Holdich continued. “I’d like to thank the MHCLG officials for the very constructive way in which they have worked with us in these challenging times. We are also very grateful for the support we’ve had from our two local MPs Paul Bristow and Shailesh Vara, who have argued our case at the highest levels of Government, and it is clear they have been heard.”

“I am pleased that we have once again found a way to continue delivering the vital services that our residents rely upon,” said Councillor Seaton. “But as I’ve said before, we cannot continue to operate in this way as demand for our services continues to rise.  We will continue to work with the Government to ensure ongoing funding for Peterborough sufficient to support those core services we all rely on. We look forward to actively engaging in discussions with them on achieving this.”

“I’d like to commend the excellent work of our own finance team in putting the case to MHCLG and to our staff in leaving no stone unturned in identifying savings and efficiencies while continuing to deliver high-quality services in such challenging times.”

Paul Bristow, MP for Peterborough, said: ” The council has campaigned for some time for fairer funding for Peterborough, and the Government have listened.  The support from Government shows what is possible when MPs and the council work together, and it is crucial for local residents that this continues.  Peterborough faces unique challenges associated with rapid growth and it’s so important this is acknowledged by Government.  This extra support would not have been available if it was not recognised that Peterborough is a well-run city.”

Shailesh Vara, MP for North West Cambridgeshire, said: “This is excellent news, and I am very pleased that the Minister Luke Hall MP and his civil servants actively engaged with Peterborough City Council and both Paul Bristow and myself. I was particularly pleased that the Minister was complementary about Peterborough’s administration under the leadership of Councillor John Holdich.

“This financial facility will greatly benefit the city and surrounding area and I am assured by the Minister that he and his team will continue to work closely with the council as we move forwards.”
The Phase Two proposals for the council’s 2021/22 budget will be published on its website by 5pm this Friday, 12th February. The proposals will be discussed by the council’s Joint Scrutiny Committee on Monday 22nd February at 6pm. They will then be discussed by cabinet on Tuesday 23rd February at 3pm.

Full Council will be asked to approve the proposals at a meeting on Wednesday 3rd March