West Suffolk car parking income could be £948,000 less than budgeted, councillors warned
Car parking income in West Suffolk could be nearly £1 million short of budget this financial year due to reduced demand, councillors have been warned.
West Suffolk Council's performance and audit scrutiny committee was briefed on the alarming 'worst case scenario' financial forecast on Thursday.
They heard one of the areas where actual income was forecast to be lower than budgeted was car parking, which could potentially see a shortfall of £948,000.
A performance quarter one report to the committee said income from car parking could total £7,456,000 against the £8,404,042 budgeted.
It added: “A best case would still be a shortfall of £200,000.
“This is due to continued reduced numbers in our car parks. While these are gradually recovering from the levels seen during Covid-19 lockdown restrictions it is not yet clear if there are now lower levels of activity in the Bury St Edmunds central car parks due to longer term behavioural change, shorter term impacts from the cost of fuel or lower available disposable income.
“This will continue to be closely monitored in the coming months, however it is uncertain how quickly this trend will develop and how any customer behavioural changes will impact on our income in the short and medium term.”
Changing habits, soaring fuel prices and the war in Ukraine have left West Suffolk Council potentially facing a total £1.2 million shortfall this financial year.
Cllr Sarah Broughton, deputy leader and cabinet member for resources and property, said: “These are the figures for the first quarter only and include a range of complex issues that are effecting all income streams across the UK for public services, including parking.
“Issues such as people’s habits following and during the continued pandemic as well as the cost of living crisis and the war in Ukraine, which is having an impact on people’s and public service’s budgets and spending patterns.
“We have seen a rise in use in all our car parks and on-street areas to or approaching pre-Covid levels.”
The continuing impact of Covid-19 and the cost of living crisis were also blamed for the financial black hole, with the performance quarter one report revealing the council could be left needing to find an extra £700,000 to plug a budget shortfall.
The council had budgeted £500,000 to be taken from reserves this financial year and put towards recovering lost income, but the report indicated a worst-case scenario could see this amount rise by £700,000 to £1.2 million.
Meanwhile, income from markets could total £260,000 – which is £99,140 lower than the budgeted £359,140.
Reasons for this were cited as a slow recovery from Covid-19 social distancing and limited trading space.
Total income from sales, contributions and reimbursements stood at just under £477,500 lower than budgeted.
Meanwhile the areas in which spending was forecast to be higher than budgeted by the greatest amount were: premises costs, at £504,830 higher, and supplies and services costs, at just under £397,590 higher.
Cllr Broughton added that the council had budgeted for reduced income this year due to the cost of living crisis and Covid-19 recovery, but other issues including the war in Ukraine were having a detrimental effect.
“We have plans in place to address some of the issues but the majority of this is out of the control of the council and affected by national behaviours by the public as well as the international situation,” said Cllr Broughton.
“This also means many of our services are needed even more. We will continue to keep the situation under review.”
The council has general reserves for such situations, but finding the extra money would mean they plunged below the £5 million the authority sought to maintain – therefore plans to replenish the general reserve would need to be considered again across the council’s medium-term plans.
However the council said the overall impact had been helped by additional income, including increased interest rates on investments and improved dividend payment expected from council-owned housing company Barley Homes, along with improved recycling credits income.
In addition, higher utility costs meant renewable measures such as Toggam Solar Farm, panels on buildings and battery charges either delivered a higher income or reduced costs.