Isle of Wight's funding gap to hit £22m, council warns

At the start of the financial year, Isle of Wight Council was expected to find just £2m in savings

The Isle of Wight's funding gap has shot up to £22m, the council has revealed.

At the start of the financial year the local authority was expecting to have to find just £2m in savings.

It blamed inflationary pressures and a lack of government funding. It means council tax bills could rise by 5%.

Speaking at a council audit committee meeting, financial director Chris Ward said costs were "significantly different" to earlier in the year.

The cost pressures were due in part to a £2.9m Covid "hangover" relating to social care and leisure facilities, a high pay award for staff, and energy costs more than tripling, he said.

More than £9m of the £20m budget gap relates to adult social care packages and provider care fees.

Inflation in core contracts, including the Highways PFI and waste disposal, amounts to a further £2.1m, while energy costs have risen by £1.8m.

While costs have risen for placements of looked-after children, demand has also increased by 30%, Mr Ward said, so another £1.4m was needed.

If nothing were to change, the authority would have to find £22m, according to the Local Democracy Reporting Service.

The government's autumn statement allows local authorities to increase council tax by 5% - with 2% going towards adult social care.

However, on the Island a 1% increase in council tax equates to just over £900,000 in revenue.

The council expects to receive a £6m increase in funding from the government towards adult social care but the rest of government funding will remain the same.

Mr Ward said if inflation remains at its current level it would actually mean a real-terms cut to the funding of 10%.

He warned councillors they should not be making any new policy decisions that would increase the financial burden.

The council's final budget is being drawn up for final approval by members in February.