Councils facing winter of ‘difficult decisions’ as inflation adds £1.5bn to costs

by Mike Thatcher
in 151 News · Council tax · Infrastructure
— 14 Jun, 2022

England’s county and unitary councils have warned that they could have to make in-year reductions to services and cancel or delay repairs to local roads and infrastructure as inflation adds over £1.5bn to their costs.

New figures, based on research conducted by the County Councils Network (CCN) and the Society of County Treasurers, reveal that the estimated cost of inflation in 2022/23 for 40 of England’s largest councils has risen by 92% since budgets were set in March.

Councils’ costs from inflation have increased from £789m in March to £1.5bn as of June, leaving £729m of additional unfunded costs. The report suggests that county authorities are particularly exposed to these rising costs because of the nature of delivering services in large rural areas.

To balance their budgets and control costs, councils are said to be facing a winter of “difficult decisions”. These could include unplanned reductions to services or delays to major construction projects, such as new roads and infrastructure upgrades.

Carl Les, CCN finance spokesperson, said that councils would have to deal with “extraordinary additional costs at a time when budgets were already under strain”.

He added: “Councils have a legal obligation to balance their budgets and have very little scope for meeting these pressures without cutting services, cancelling or delaying major infrastructure projects, or proposing even higher council tax rises next year.”