By Jason Lewis, Local Democracy Reporter 
Southampton City Council leaders have proposed a balanced budget without exceptional financial support from government – but residents will face a council tax increase.
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The Labour administration’s £230.78 million budget plans for 2025/26 include a 4.99 per cent rise in council tax, which is the maximum allowed without requiring a referendum.
If approved next week, this means a band D property will pay £1,903.14 to the city council.
This represents an additional £1.74 a week compared to the current year.
Cabinet member for finance Cllr Simon Letts, interviewed in the video below, said: “All councillors here are residents of the city. They talk to people all the time.
“We understand the difficulty some people are in in terms of balancing their budgets.
“Our strategy was to raise it by what we thought was the minimum – 4.99 per cent.
“Two per cent of that goes straight to social care, so the rest of the council’s budget is 2.99 per cent, which is just a touch above inflation.
“Obviously, once we have got things established and settled we can revisit this decision next year in terms of setting the council tax then.
“Hopefully we can give some relief at that point.”
The local government finance settlement provided an additional £11.3million net for the council, which Cllr Letts said was essential to setting a balanced budget. The proposals include £12.72million of directorate pressures and savings totalling £49.7million. Just shy of £35million of the savings relate to the transformation programme, which was launched last summer.
This programme is currently expected to lead to the removal of 135 to 159 full-time equivalent jobs over the next two years.
Seventy-four of these could be vacant posts, with between 61 and 85 redundancies. Most of the roles are in adult social care.
The council is not applying to government for permission to borrow money to balance the budget as was the case 12 months ago.
For 2024/25, £39.3million of the £121.6million exceptional financial support package was to plug a structural deficit in the budget.
The council is now expecting to only borrow £20.3million for this year’s budget come the end of March.
The projected in-year underspend is in large part due to £9.5million of transformation savings being delivered earlier than first planned.
Council leaders have asked to extend the existing exceptional financial support into 2025/26 to cover costs related to an equal pay claim, transformation and restructuring.
The local authority is waiting for a decision from central government on this request.
On the progress made to address the council’s financial challenges, deputy leader Cllr Letts said: “It’s an extraordinarily big task that we have taken on and I must pay tribute to our staff here at Southampton City Council, who have worked through this organisation to turn this financial position around.
“We are now at a position where we can set a balanced budget based entirely on our own resources without any further exceptional financial support needed and that is tantamount to the work that has gone on here.”
The budget and medium term financial strategy will be discussed in detail at an overview and scrutiny management committee meeting on Thursday, February 20, before going to cabinet and full council next week.
Photo/video: LDRS