Why it matters: The overspend reflects wider financial challenges facing local authorities across England, where councils are grappling with a projected £6.2 billion funding gap over the next two years.
The big picture: The council originally planned to add £944,000 to its reserves but instead had to draw down £732,000 – representing a £1.7 million adverse change from the budgeted position.
By the numbers:
General Fund working balance stands at £5.536 million at year-end
Housing Revenue Account performed better, adding £2.829 million to balances
Capital spending totalled £71.698 million against a budget of £105.943 million
Corporate savings programme achieved 92.4% of its £858,000 target
What drove the pressures: The council identified £3 million in additional spending during 2024/25, primarily from ongoing inflation impacts, increased demand for homelessness services, and income shortfalls in some areas that remain below pre-pandemic levels.
The response: In September 2024, the Executive approved a comprehensive savings programme expected to deliver between £13-16 million for the General Fund and £3-4 million for the Housing Revenue Account over the medium term.
What's next: The council faces continued uncertainty regarding government funding beyond 2025/26, with limited information available about future financial settlements despite announced reviews of the local government funding framework.
What they're saying: Councillor Martin Cook, Ipswich Borough Council Portfolio Holder for Resources, said, “The Council remains committed to maintaining financial resilience, balancing its budget, and delivering high-quality services that meet the needs of our communities.
“In response to the national and local economic challenges of the past financial year, we took prompt and proactive action to strengthen our financial position. This includes the comprehensive savings programme agreed in September last year.”
“Our robust financial management has delivered a strong year end position despite challenging circumstances. This package of measures is a key part of the Council’s financial strategy for 2025/26 and beyond, ensuring we continue to manage our resources responsibly.”
The context: Nationally, an increasing number of councils have issued Section 114 notices signalling severe financial distress. The Local Government Association reports that "councils in England face a funding gap of almost £6.2 billion over the next two years just to keep services standing still."
The bottom line: Despite the overspend, Ipswich Borough Council maintains working balances above minimum recommended levels and continues to deliver essential services while implementing measures that try to address ongoing financial pressures.
