Public sector bodies in north Essex have had more than half a billion pounds cut from their budgets over the past five years.
Today the Chancellor will announce the latest Comprehensive Spending Review, where budget cuts in different departments will be announced.
Ahead of that, public sector organisations have tentatively predicted a further £141million will go from their budgets next year alone.
These figures do not include some other impacts felt by public bodies – such as the £143m Colchester Borough Council estimates will be wiped off of its housing budget over the next 30 years by a government-introduced cut of 1% in social rents.
An investigation by the East Anglian Daily Times has found the extent of funding cuts and forced efficiency savings across councils, health providers and the emergency services since 2011/12 to be in the region of £598.145m.
Local authorities have been some of the hardest hit in relation to their turnovers, particularly as the government has warned district-level councils could face being almost entirely self-funding by 2020.
In the health sector, while officially the NHS has had its budgets ring-fenced, other cost pressures such as inflation, pay rises and an increase in the number of patients has forced deep efficiency savings while trying to protect levels of clinical care.
At the NHS trust running Colchester’s hospitals, a report published this week has said payments to creditors have had to be delayed as the trust risks running out of cash by March (see below).
Emergency services have not been immune. Essex Police announced in September plans to drastically cut the number of PCSOs and police stations in a bid to hit savings targets, while Essex County fire and Rescue Service is currently analysing a whole range of proposals from the “nuclear” option to minor efficiency savings ahead of a budget report due early in the New Year.
Colchester Hospital University Foundation NHS Trust
The trust running Colchester General Hospital faces running out of cash by the end of March next year.
A finance report going to the Colchester Hospital University Foundation NHS Trust board shows the trust hoped to hold a cash balance of £1.5million at the end of the financial year.
But it is now “at risk of fully depleting its cash balances”, and in order to meet monthly cash targets from last month the trust has now slipped its creditor payment period by up to 40 days.
The trust was planning for a £30m deficit this year, but without further action it is actually looking at building up an additional £9.4m in deficit this financial year.
Much of its overspend comes from the use of agency staff – a cap on which, limiting it to 9.2% of overall staff pay – is set to be introduced soon.
However, in October the proportion was 24.5%, almost double where it needs to be to reach the target.
Part of the reason for the sudden deterioration in the trust’s financial position is that it had expected to borrow money from the Department of Health, via support from watchdog Monitor, to plug the gap.
But a report going to the trust board on Thursday states: “Department of Health restrictions on the amount of interim support they are now prepared to provide the trust has seriously impacted on the trust’s cash plan.”
A trust spokesman said: “While our income for this year is ahead of plan, we have spent significantly more than expected, principally because of overspending on agency staff.
“Financial stability has to be balanced against the
delivery of key national standards, such as the four-hour A&E and 18-week Referral To Treatment standards.
“One of our key priorities is to improve our financial position and we are taking many steps to do this.”
Essex Police
Essex Police looks set to borrow around £50million to invest into its estates programme.
The force revealed in September it was looking to build new headquarters and revamp a number of police stations to bring them up to scratch.
It is hoped the move will cut out the need for £30m of repairs and maintenance needed to make the existing police estate fit for purpose, and reduce the £2m annual maintenance bill.
Much of the funding for the project will come from selling 50 buildings, including the current headquarters in Springfield, which occupies a prime residential site.
However, this money will not be available immediately.
Nick Alston, Essex Police and Crime Commissioner, admitted in September that up-front borrowing may be necessary to fund the scheme but said now was not a bad time to do so with low interest rates.
A report being debated by the Essex Police and Crime Panel on Thursday reveals the estimated value of borrowing is £50m.
Mr Alston said: “All of the figures are under review – we have made conservative estimates of what we will get from sales.
“We have to invest to save, and we don’t have the money in our reserves.
“The savings are hard to estimate precisely, but we are confident of saving at least £5m every year by the time we have finished our estates programme. I think it could be significantly higher.
“This is not just for savings, it’s also about getting a police estate that’s fit for the future.”
A final decision is still some way off, he added.
Essex Police needs to make estimated savings of £63m by 2019/20.
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