Councillors clash after warning £7.6m hole in West Northamptonshire budget could get even bigger

Councillors are being warned a £7.6 million hole in its budget is likely to be just the tip of the iceberg.

A report to go before West Northamptonshire Council's cabinet on Friday (September 23) confirms the cost of living crisis is pushing up expenditure way beyond the £10 million contingency set aside for the current financial year.

Spiralling inflation, increasing homelessness and greater demand for adult care is highlighted as key pressures impacting the Tory-run council’s finances.

The report warns: “It is critically important to highlight that the demand for services and other external factors may increase the overspend position further.”

Opposition councillors say they warned when the £342.2 million budget — including the £10 million contingency — was “fragile” when it was approved in February.

Labour's finance spokesperson, Danielle Stone, added: “We do not blame the Conservative administrations in West Northants or Parliament for the crises that have affected the world over the last few years.

“We blame them for failing to deal with them.”

Earlier this month, councillors vowed to protect services after admitting it was taking “precautionary steps" to deal with significant financial challenges.

But the latest report predicts a £7.6 million overspend and warns: "It is the view of officers that we may not have seen the worst of the financial pressures yet.”

Cllr Malcolm Longley, Cabinet member for finance, said: “As a council we are taking the necessary steps to manage the financial pressures we’re facing.

“While we are not alone in this, and many organisations across the country are experiencing the effects from the cost of living crisis and rising inflation, we want to ensure we are on the front foot in managing this.

“We have carried out a robust and thorough financial review and implemented measures to manage and mitigate these issues as far as possible.

“By working closely with our teams we can continue to deliver vital services for our communities, whilst seeking to identify further opportunities to save money and generate income."

The report says inflation standing at 9.9 percent affects contracts, operations and running costs.

It adds that increasing homelessness has meant the use of expensive nightly purchase temporary accommodation and there has been extra adult social care demand due to hospital discharges.

Labour is furious that the council's problems come at the same time as the government is set to use a mini-budget to slash taxes for the wealthy in a bid to stimulate growth.

Cllr Stone said: “After a decade and more of seeing public funding poured into private pockets of landlords, venture capitalists and hedge funds, we are witnessing the collapse of essential services.

“This is happening at a time when escalating rents, food prices, energy and fuel costs are driving up demand for support from the council.

“Labour warned in February that this year’s budget was fragile. We have been proved right and the lesson has to be that the market economy does not deliver for public services.

“In return for taxation and toil, residents expect a government that prepares and protects. The Conservatives have failed on both counts.”