The Budget Challenge
Falling income – rising costs
Over the past 14 years, the amount of money available to the council has fallen in real terms. This is a situation that is being seen across the country and has led to councils facing a cost of operating crisis, with financial pressures like never before.
The main sources of income for any council continue to be from Council Tax, Business Rates and government grants. How much Bristol can expect to receive in government funding for council services next year and beyond is very uncertain. The UK’s economic outlook remains challenging as the economy continues to be affected by global events, as well as the ongoing national cost of living crisis. This makes forecasting our future finances difficult and requires us to prepare for multiple situations.
During the past year, demand on our services has continued to increase significantly as the city’s population has grown. We continue to see increases in cost and complexity of care and support required for children and adults. Limited market provision of services from private, voluntary or other public sector organisations drives prices for care upwards.
Just like all other organisations and households in Bristol, we also face the continuing impact from the levels of high inflation in recent years, alongside pay pressures. All of which are contributing to higher costs of delivering many of our core services. Prices remain high for goods, services and utilities, meaning that in many cases, the cost of delivering services next year will be significantly more expensive than it was in recent years.
How costs have increased
- Demographic pressures with increased numbers of both older people needing social care, and increased demand for care from working age adults
- Increases in the National Living Wage costs
- Rising costs of care to support people with increasingly complex care needs and the associated workforce challenges across the sector
- Inflationary pressures
Adult Social Care
In the current year, the budget for adult social care is £190.1 million. This is all revenue budget. This is forecast to increase due to the following pressures that have been building for many years:
Housing Support
In the current year, the revenue budget for housing is £22.9 million (excluding the Housing Revenue Account, which is a separate ring-fenced budget). This is forecast to increase due to pressures within the temporary accommodation sector for people experiencing homelessness in the city due to a number of factors including the cost of living crisis, unaffordability of the private rented sector and reduced supply of social and affordable housing.
Children's Social Care
In the current year, the budget for children’s social care is £98.7 million. This is all revenue budget.
In Bristol the number of children in care has grown from 737 in April 2023 to 771 in April 2024. This mirrors trends nationally. As well as an increase in demand, there has been a reduction in the number of internal placements, which has meant the council has had to place more children and young people in higher cost residential placements, such as ‘Out of Authority’ (in another local authority area) and ‘Independent Foster Agency’ care (non-local authority agency).
Education Services
In the current year, the revenue budget for Education Services is £26.4 million (excluding the Dedicated Schools Grant, which is a separate ring-fenced budget). This is forecast to increase due to pressures on Home to School Transport where there are ongoing increases in the number of children with Education, Health and Care Plans (EHCPs) requiring transport to school and increasingly that transport is outside the local area.