Prior to the first meeting of Southampton City Council’s informal Improvement Board, the authority has reported that despite finding “significant savings” it still faces a combined budget shortfall of almost £150m over the medium term.
In July, the council reported that it had commenced “informal discussions” with the government as it had forecasted a budget deficit of almost £30m for 2023/24 due to inflation and rising interest rates.
According to Southampton’s latest proposals in its October medium term financial strategy (MTFS), the council has identified “significant savings” of £16.6m, which brings its 2023/24 budget pressure to £14.1m. This MTFS will be presented to the council’s Cabinet on 17 October.
However, the council outlined that it still faces budget shortfalls over the medium term with forecasts of £37.8m in 2024/25, £44.9m in 2025/26 and £52.4m in 2026/27.
Simon Letts, cabinet member for finance and change, said: “While we are seeing an overall improvement in our financial position, there is a significant amount of work still to do.
“The measures identified in the cabinet report are not sufficient to close our budget gap and more proposals will be coming forward in the next few weeks, with the public being consulted where necessary.”
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Improvement Board
Southampton City Council’s financial update comes as its informal Improvement Board is set to meet on 16 October.
Last month, the authority announced it had established an Improvement Board to help the authority restore its finances. Appointed board members include Theresa Grant (who has been elected as chair), Rob Whiteman, Peter Marland, Trevor Doughty, Craig McArdle and representatives of the council’s cabinet and its chief executive Mike Harris.
On the board’s appointment, a council spokesperson said: “We are pleased to announce we have established an informal Improvement Board whose members have considerable expertise in helping other local authorities deliver transformation and create a sustainable financial footing.
“The board will provide support and challenge as we develop and deliver our improvement plan and transformation programme.”
Full details of the improvement board are listed at the bottom of this article.
In July, Southampton warned that if it did not take actions in year to deal with its budget shortfall, the council would become “financial unsustainable” and could issue a section 114 notice.
The authority also warned that its reserves were decreasing rapidly, with its earmarked revenue reserves valued at £55m at the end of 2022/23, having fallen from £87.7m at the end of 2019/20.
Members of the informal Improvement Board:
Theresa Grant (chair) – Former chief executive of Northamptonshire County Council, who oversaw the creation of the two new unitary authorities. She was also recently interim chief executive at Liverpool City Council.
Rob Whiteman – Chief executive of CIPFA.
Peter Marland – Leader of Milton Keynes City Council and chair of the Local Government Association’s (LGA’s) resources board.
Trevor Doughty – Director of children’s improvement at the LGA from 2020-2023.
Craig McArdle – Corporate director of adults and health at Buckinghamshire Council.
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