close up of calculator keyboard
Image: editors keys via Unsplash

Ed Blake discusses financial challenges ahead of Isle of Wight’s budget meeting

Ed Blake, leader of the Conservative group of councillors, shares this latest ahead of the budget meeting on Wednesday evening (from 5pm). Ed


The Council, under the Independent and Green Alliance, has been running with a structural deficit, which to date it has propped up by using those reserve funds not specifically ring-fenced. These are the General Reserves, the Covid Reserves, and the Transformational Reserves.

The proposed Independent and Green Alliance Budget, as endorsed by Cabinet, is projecting that there will be an ongoing structural deficit for the next three years.

Reserves £1.5 million above the minimum allowed
By the end of this current financial year, the Cabinet will have spent the entire Covid and Transitional Reserves completely and has allocated £4.5 million of General Reserves to cover the projected year end overspend; this will leave the balance merely £1.5 million above the minimum the Council is required to maintain.

Failure to keep above that level of reserves can result in the Government appointing Commissioners to take over the running of the Council.

Impacted by years of budget cuts
Whilst all Councils have been impacted by years of budget cuts, which are continuing under the new Government, the critical pressure in the Isle of Wight’s budget has been adversely affected by the lack off forward planning by this administration to address the ongoing overspends in Adult Social Care and Children’s Services.

Without addressing some of these underlying causes of the overspends, they are unlikely to go away. The current Cabinet appears to expect the budget position to be resolved by a massive increase in Central Government funding at some point; a more realistic approach is to assume it will be less than hoped for and take longer to deliver, if it is delivered at all.

Excessive spending pressures
The current budget pressures are created by things like:

  • Primary Schools current in year deficits predicted to be approximately £2 million because of failure to address school place issues 4 years ago.
  • Excessive and expensive off-Island placement of children in care (being looked at by new Children’s Services Team).
  • Excessive use of B&B and caravan accommodation for the homeless.
  • Inefficiencies in the delivery of Adult Social Care – recently confirmed by the Isle of Wight Care Partnership.
  • Being an outlier in terms of Adult Social Care costs.

The new Committee system of governance will need to start to seriously address the underlying issues putting pressure on budgets. All of these can be addressed, at least in part, by Capital Investment.

£40m motion for affordable housing
The Conservative Group previously put a Budget Amendment, which was passed by Full Council, to allow a draw down facility of £40 million to provide affordable housing for Islanders. At the time the resolution was passed the interest rate for such Local Authority Loans Board was 2.4%, however the Cabinet decided not used this option and the £40 million draw down facility is still untouched and available, although current interest rates are just over 6%.

The Conservative Group amendment gives the new Committee System the ability, subject to a viable financial case, to use this in a wide range of ways including but not limited to:

  • Prefabricated units
  • Working in collaboration with any appropriate third party
  • Providing on-Island Children’s homes
  • Sheltered accommodation
  • Compulsory purchase
  • Purchase at auction.

Fast decision-making
The amendment also puts in place the mechanism used in Portsmouth for fast decision making when required.

The Independent and Green Alliance Budget as it stands just makes further cuts and offers minimal change other than by claiming ownership of windfall projects initiated and funded from elsewhere.

Under the Committee system there is an opportunity to create a strategic vision for the Island. The Conservative Amendment offers a way to seed fund new strategic initiatives to deliver better outcomes for Islanders.

Budget Amendment Proposals from the Conservative Group
Budget & Council Tax Setting 2025/26 And Future Years Forecasts

Recommendation 21(k) be amended to:

The Capital Programme 2024/25 to 2029/30 set out in Appendix 5 which includes all additions, deletions and amendments for slippage and re-phasing and noting that:

The scope of the Capital Scheme (32) entitled “Affordable Housing” be available for investment into any of the following but subject to a satisfactory business case and financial appraisal approved by the S.151 Officer that demonstrates that the scheme is viable and that all annual revenue costs (including the cost of debt repayment) can be met from any income and/or cashable savings generated directly by the investment.

The scope of Capital Scheme (32) entitled “Affordable Housing” to include:

  • Any form of housing ownership for general needs housing
  • Any suitable type of housing construction subject to suitable warranties and guarantees.
  • Temporary Accommodation of any type and for any homelessness reason including hostels
  • Supported Accommodation for Adults with additional care needs.
  • Supported Accommodation for Children in care.
  • Accommodation for Care Leavers
  • Properties in any state of repair suitable to be re-purposed cost-effectively for any of the purposes stated, including by way of Compulsory Purchase Order
  • Contributions to third parties to co-fund and deliver any of the Accommodation types listed above.