Gloucester City Council to use reserves after £1.4m overspend

The rocketing cost of housing, energy and interest rates has forced the council to use part of its reserves

Gloucester City Council will be forced to use part of its reserves as the authority faces a £1.4m overspend.

The council said it is feeling the consequences of the wider economic impacts of higher interest rates and energy prices.

Key pressures include temporary accommodation costs for the homeless which saw a £451,000 overspend.

The council is looking at new ways to improve housing services.

Civic chiefs are facing a forecast overspend of £1.1m in the planning and housing portfolio and the council is £362,000 over in its corporate and funding portfolio.

The council said temporary accommodation costs for the homeless saw an overspend as an increasing number of people are finding themselves unable to meet the cost of housing.

Gloucester City Council overspent on leisure provision by £292,000 in the first quarter

The council's report, which was written before Aspire's collapse, said the spike in energy costs and the cost of living crisis have led to the leisure provision costs increasing.

It had an overspend of £292,000 in the first quarter and were forecast to be £675,000 over budget by the end of the financial year.

There has also been a drop off in income from planning applications as development costs increase and the boost of small planning applications caused by Covid home working falls away.

Increased interest costs relating to council projects is also forecast to cause pressure on the council's budget.

The council continues to hold an earmarked reserve balance of over £4m.

'Poor financial management'

Opposition councillors said the Conservative administration's financial management of the council has been poor and fear the situation could be worse as the accounts have not been audited for the last two years.

The council is considering purchasing property to increase the availability of temporary accommodation and reducing the reliance on expensive hotel rooms.

It has also applied to the Government for funding to meet the rising energy costs of heating the pools at GL1.

Conservative planning and housing strategy cabinet member, Stephanie Chambers, said they are always looking to improve housing services in the city.

"Gloucester is a vibrant and attractive city in which to live, but rent increases in the private rented sector, allied with cost of living challenges, have limited the availability of affordable homes for residents," she said.

"We are always looking at innovative ways to improve housing services and are currently directing our resources to ensure we can implement a range of solutions for these challenges as quickly as possible."