Residents of Cornwall will have to pay the maximum amount of council tax for the second year running to help fund a near financial crisis for services for children and the elderly in the Duchy.

Cornwall Council’s deputy leader and portfolio holder for resources Cllr David Harris told a meeting of its Cabinet today (Wednesday, February 7) that “unless there is a fundamental shift in how we are financed, it is only a matter of time before we are teetering on the edge of the same financial abyss that other councils are faced with today”.

The Cabinet signed off its budget, which will include an overall council tax increase of 4.99 per cent, the equivalent to a Band D charge of £1,892.75. The council tax requirement for the council’s own purposes will be set at £393.699m and the council element of the tax will be increased by 2.99 per cent, plus a levy of two per cent to be spent solely on adult social care.

The authority’s Conservative leadership also agreed that a net budget for 2024/25 of £769.233m is set and that from April 1, 2025 second home owners and any dwellings occupied periodically are charged a 100 per cent council tax premium, as are properties which have been empty for at least a year but fewer than five years. The latter comes into effect from April 1, 2024.

The meeting heard that the council had received its annual local government settlement from the Government this week, which backdated two years will mean an additional £880,000 on top of the budget. The council will also receive one-off support from Westminster of £6.5m for the year ahead, but Cllr Harris said Cornwall Council needs a lot more financial help in order to survive.

He said to draft a budget without drawing on reserves of £14m was impossible due to the sheer scale of the financial challenge facing the council. “I totally agree with the County Councils Network and other bodies which are screaming that the sector is teetering on the edge of a financial abyss, with some, of course, already having tumbled down that abyss.

“So while I am pleased that the Secretary of State has listened and responded with additional funding for the sector, an extra £6.5m in our case, we cannot be smug here. That £6.5m in reality is a one-off for next year and there’s no future promise. The figures for future years are very scary, which is why we must continue to press for a long-term settlement that is based on a fairer funding formula because that is not what we have today.”

The meeting heard that £28m of savings had to be made to achieve the budget. “On savings, there has to come a time when the elastic is drawn too tight and it snaps, and I fear that we cannot be too far from that time now,” added Cllr Harris.

Council leader Cllr Linda Taylor responded: “Saying it’s been a ‘challenge’ doesn’t actually describe the pain and the grief of looking at where you can allocate the money. We’re talking about our most vulnerable in society – our children and our elderly population. How we deal with that defines us as a society.

“When you’re dealing with the most vulnerable in society it’s not acceptable to have to worry about how you’re going to meet those challenges and I take every opportunity to absolutely endorse the fact that we do need fairer funding in Cornwall and the certainty of long-term financial settlements.”

The council has reduced a forecast overspend of £14.9m to £9.4m, which Cllr Harris said had been managed by a series of one-off measures, or “sticking plasters”.

“However, we cannot allow that forecast reduction to mask the truth that the costs of providing a number of our statutory services continue to escalate, mainly due to increased demands. This is acutest in the areas of providing emergency accommodation, home to school transport and children’s social care, which between them require additional funding in the 2024/25 budget of £22m.”

Children and family services is forecasting an overspend of £12.2m this year and there still remains a risk that by the end of the financial year this overspend will have increased. Home to school transport services is forecasting an overspend of £7.4m, which is also likely to increase. Temporary and emergency accommodation is likely to see an overspend of £11.5m.