Financial projection

Each year, the council faces increases in costs for pay and inflation of approximately £1m but income from increases in fees and charges council tax generate approximately only an additional £0.5m, leaving a funding gap of £0.5m before the council even consider funding new or improved services. The council's financial forecasts over the next 5 years currently identify a gap of around £2.6m between the funding available and what the council needs to spend in order to maintain existing service levels and fund some modest growth. This assumes that council tax increases are contained within Government capping limits which are currently 5% and, for 2009/10, would mean that the council would have to limit any council tax increase, for service provided by Cheltenham Borough Council, to £8.86 per year or 17p per week. The funding gap is as a result of the following factors.