THE COST of living crisis will hit Rugby Borough Council’s budgets by more than £2.7million, according to a finance update report to be presented to the council’s cabinet next week.
The budget report, which provides financial updates to councillors ahead of their budget-setting meeting to be held in February, shows the cash impact of inflation was projected to be £753,000 earlier in 2022. Less than 12 months on the impact is now projected to be £2.765 million – wiping out savings that had already been made.
Councillors will hear the impact of the rise in inflation will be tackled through existing budgets where possible, reducing the council’s exposure. Contractual increases are likely to be £537,000 more than previously expected, with the cost of gas going up an extra £312,000 and electricity an extra £161,000.
But the council says the government’s autumn statement provided some good news, with continuation of the New Homes Bonus providing an extra income of around £1million, with a further £1.075 million from the government’s “three per cent guarantee” fund, which ensures councils have a minimum increase of spending power of three per cent.
The statement also provided confirmation that the council will be able to retain around £6million in business rates growth.
The report sets out a number of savings proposals and assumes an average increase in Band D Council Tax of £5 per year, along with inflation increases in fees and charges.
But the report is a financial update and the budget will be decided by councillors at their meeting in late February 2023.
RBC leader Coun Seb Lowe said: “Our residents and businesses will be well aware of the impact of inflation on their own finances, and these increases will also have a significant effect on the council’s budget.
“Nevertheless, the government’s autumn statement has now provided us with more certainty.
“This council has a strong track record of prudent financial management. Whilst the council’s cabinet will note the updated financial position presented in this report, we will be sure to consider future services and the impact on our residents as the council prepares to set its budget next month.”
The report will be considered by the council’s cabinet at its meeting on Monday January 9.