Council agrees budget but financial crisis continues

In the previous edition of Liberal News, I explained why Southampton’s budget for the 2024/25 financial year was not being set as scheduled. Since then, the Council’s request for Exceptional Financial Support (EFS) has been granted, enabling the Labour administration to put forward a balanced budget proposal.

However, the budget is far from balanced. The Council has a structural budget deficit of about £40million (about 17% of the total budget), and the terms of the EFS mean that this will have to be eliminated over one year. This will be done through a ‘Transformation Programme’, which will see further savings made (in addition to the £22 million in the 24/25 budget), asset disposal, and transformation in how the Council delivers services.

In 12 months’ time, the Council will almost certainly be significantly smaller. Difficult decisions lie ahead. The impact on services and the consequences for Southampton’s citizens remain unclear.

The situation was not inevitable. Poor financial management by Labour and Conservative administrations has played a big part in reaching this crisis point. Cuts to local government funding and the wider social and economic crisis across the country continue to put pressure on councils’ finances. By coincidence, the Chancellor Jeremy Hunt announced his budget for the country yesterday, too. I have few grounds for optimism there, but at least with every passing day the general election gets closer.