Source: City of Portsmouth
Portsmouth City Council’s administration has announced proposals that address immediate and unexpected financial pressures without impacting services to residents. Alongside this the plans also look to mitigate one of the largest financial pressures facing councils across the country.
Nationally councils are facing increasing demand and costs for social care services and temporary accommodation.
In Portsmouth the number of households in temporary accommodation has gone up by 54% in the last year to more than 500, while the costs have risen by 84%. This resulted in the current forecast of costs going £5.9m over budget in 2024/25, even higher than the 5.6m shortfall predicted in October 2024.
The budget proposals include investing £31m in acquiring properties to use as temporary accommodation for residents who might find themselves in situations where they have been made homeless. This would reduce the current need to rely on less suitable but costly privately-rented accommodation, with an expectation this will start to ease the existing budget pressure this year and significantly improve the position over the following two years.
Cllr Steve Pitt, Leader of Portsmouth City Council, said:
“It is good news for the city that we’re able to put forward a budget that addresses the immediate financial pressures without reducing services that people rely on.
However, there are funding problems nationally with social care and temporary accommodation that need to be solved. As insufficient government support is coming forward we want to take the proactive steps we can to address these issues and provide better solutions for our residents. The revenue budget savings need to come from £191m of council spending and will take the council’s total savings made in the last 14 years to £110m.
“Last year it was forecast we would need to save £1m in this budget, these spending pressures doubled that and we need to stop that happening in future years. By investing in our own temporary accommodation stock we can save the council tens of millions of pounds in the next decade.”
In addition to the longer-term view the council’s administration is proposing £2m of savings to its revenue budget, which will be met through efficiencies and generating extra income without seeing any significant reduction in services to the public.
The proposals also include raising council tax in line with government’s expectation of 4.99%, 2% of which will go specifically towards funding adult social care. In total the council tax increase would raise £5.1m for the council and see the average Portsmouth home’s (band B) council tax bill increase by the equivalent of £1.29 per week.
Cllr Pitt added:
“We are always mindful of the impact of the decision to increase council tax and don’t take the decision lightly, but the funding government gives us is based on the assumption we will increase council tax by 4.99%, and it still isn’t enough to pay for everything we need. Councils relying on significant use of reserves to balance budgets are increasingly finding themselves in severe financial distress and here in Portsmouth we will not allow that to happen. The only alternative to raising council tax, is to reduce services that people rely on and doing that would hurt our residents even more, especially those who rely on them the most.”
The council will be receiving additional income from renting out new business spaces while there will be increases of 10p or 20p an hour to parking charges in certain locations, in line with existing policy. This follows a freeze on parking charges last year, meaning it is a below inflation increase over the two-year period.
The proposals also include investment in regeneration and economic development, such as future development of the city centre. Funding has been allocated to develop options for regenerating Guildhall Square and finding a more efficient solution to the current Civic Offices building, alongside continued financial support for the City Centre North project, which will deliver new housing, leisure and retail space to the area.
The budget proposals will be considered at the council’s Cabinet meeting on 11 February and if accepted will then go to the Full Council meeting on 25 February for approval.