Richmond Council has unanimously approved its Medium-Term Financial Strategy (MTFS), which outlines a projected budget gap of nearly £70 million by 2030/31. The strategy highlights the significant financial challenges facing the council, driven by government funding cuts, rising demand pressures, and inflation.
Councillor Jim Millard, Lead Member for Finance and Resources, described the situation as the most significant financial challenge in its history.
He emphasised that while the council is committed to reform, it requires adequate time to adapt responsibly. Government is asking us to change faster than a responsible council can safely change while demand is rising at the same time,
he stated, urging the government to provide councils with the necessary time to make informed decisions that do not disproportionately affect the most vulnerable.
The council faces a projected budget gap of nearly £70 million over the next decade. A significant contributor to this gap is the government's Fair Funding Review 2.0,
which is expected to result in a reduction of around £29 million annually by 2028/29, representing a 58% cut to core funding. Councillor Michael Wilson criticised the government for leaving the council £29 million worse off, questioning the fairness of a system that appears to penalise well-managed councils with funding cuts.
Rising demand pressures are particularly acute in adult and children's social care and homelessness services. Councillor Millard noted the strain, stating the council is change faster than a responsible council can safely change while demand is rising at the same time.
The MTFS report highlights significant demand growth in care packages for social care and homelessness. Adult social care is experiencing increased demand due to a higher level of care needs and patients being discharged from the NHS with complex needs. For children's social care, pressure stems from providing care for looked-after children, with an increasing proportion requiring more expensive residential or independent foster placements due to complex needs and a shortage of in-house foster placements. Homelessness services are also facing growing pressures on temporary accommodation due to increasing admission levels and frozen Local Housing Allowance rates not keeping pace with private sector rent growth.
Councillor Sarah Kahn highlighted the human impact by noting that the council currently supports 8,328 households under the Council Tax Reduction Scheme.
The MTFS assumes maximum council tax increases of 4.99% annually, which includes a 2% adult social care precept, up to 2028/29. This flexibility is assumed to be used in full, as stated in the MTFS report.
Beyond council tax increases, the council is undertaking an ambitious transformation programme
aimed at improving financial sustainability and delivering better outcomes for residents. Councillor Millard stated, We are already undertaking one of the most ambitious transformation programmes in the history of this Council, driving almost £40 million in savings.
The programme involves redesigning services, looking at contracts, looking at our procurement, prevention and income. We're looking at our assets, asking how we can get the best value long term for residents.
The MTFS report projects this programme will deliver £8.2 million in 2026/27, with the potential for £39.2 million in ongoing revenue savings by the end of the MTFS period. The report also mentions a Local Area SEND Reform Plan
to implement government reforms for special educational needs and disabilities, though specific timelines for all reforms are not detailed.
The council is also exploring advertising, sponsorship and branding of our assets
as a measure to generate further revenue. Councillor Millard noted that great care needs to be taken in not devaluing key assets and ensuring we adhere to heritage conservation policies that seek to preserve the character of the borough.
Additionally, the council is calling on the government to reconsider its financial cuts to the council and demanding more time for transformation
and is consulting residents on proposals to submit a challenge to the government under the Sustainable Communities Act, seeking to address funding allocations, transition periods, and the retention of locally generated income.