Hertfordshire County Council finance chief Steven Pilsworth has warned that the organisations is in "an extremely serious financial position", amid plans for a council tax increase.

As councillors begin to consider proposals for HCC's 2024/25 budget, Mr Pilsworth has said that they may not be able to balance future budgets without additional funding or "significant reductions in services". 

Budget plans would see the council’s spending increase from £98million this year (23/24)  to £1.1billion.

But, to ensure the budget is balanced, it also includes £46m of savings, the use of an additional £13m of council reserves and an increase in council tax of 4.99 per cent.

In his report to councillors, director of finance Mr Pilsworth warns that ‘extremely volatile’ costs could actually ‘outstrip’ the planned increase in spending in 2024/25.

He stated that despite making savings of £3.5bn since 2010, the council will still need to deliver the "biggest savings programme for a decade", which he says will be "very challenging to deliver".

The planned use of county council reserves to balance the proposed budget come on top of the estimated £24.5m the council expect to use by the end of 2023/24 – totalling £38m in just two years.

In his report, Mr Pilsworth warns councillors that this is "unsustainable", suggesting that county council reserves are being rapidly eroded – and are now at "dangerously low levels".

Earlier this year the council brought in a ‘recruitment prioritisation’ policy – freezing recruitment to all but essential roles - as part of a package of measures designed to reduce costs.

That followed a decision by the council for the vast majority of staff to move away from its landmark headquarters at County Hall, Hertford, to Stevenage.

But despite extensive actions, Mr Pilsworth’s report says the council is still forecasting a £15.7m overspend this year.

“The council faces significant financial pressures from inflation and increases in demand for services, in particular, but not exclusively, for social care,” he says.

“Also, it is apparent that further efficiencies have become harder to achieve, and will require more resource and investment to achieve through complex transformation programmes and service re-design.”

In his report Mr Pilsworth points to the impact of inflation and the increases in demand for statutory services, as well as the impact of the cost of living.

He also highlights the impact of significant increases in eligibility for SEND support, as more children receive Education, Health and Care Plans (EHCPs).

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He says the financial position of the council has "never been more challenging". And he warns that in future years – without additional funding – there could be ‘significant’ reductions in services.

“Unless there is further funding available (either through grant or flexibility in council tax), or national solutions to social care pressures, then it is difficult to see how the council will balance future budgets without significant reductions in services,” he says.

The council’s budget-setting process will continue until February 13, when a meeting of the  county council will meet to debate and vote on the proposals.