BRADFORD Council faces a huge budget deficit in the coming years, in part due to its energy bills rising by an estimated 118 per cent.

New Council documents reveal that next year the authority will have to find a way to bridge a £77m financial black hole in its budget.

This will be caused by a mix of rising energy costs, inflation, and spiralling costs within the Council’s beleaguered Children’s Services department, and “significant actions” will be needed to fill the gap.

And that will be followed by £72m gap the following year.

The Council’s Executive will hear about the increasingly perilous financial situation when it is given an update on its Medium Term Financial Strategy at a meeting on September 6.

Either a large amount of Government support or a cut in services would be required to balance budgets over the next three years – members will be told.

The Council has revealed that it had budgeted for a five per cent energy price increase in 2022-23.

But newest estimates from the Council’s supplier are now anticipating a 118 per cent price increase in 2022-23.

With the Council having to heat and power facilities such as libraries, swimming pools and leisure centres, this will lead to eye watering energy costs for the authority.

A Council spokesman said: “It is currently assumed this will persist into 2023-24, with further increases from 2023-24. More recent national coverage of energy costs indicates this could increase still further.”

A rise in the Consumer Price Index, partly down to the war in Ukraine, has also thrown the budget planning into disarray.

The Council budgeted for a four per cent CPI increase on general contracts but according to the Treasury’s averaging of independent forecasts in July the correct figure is expected to be at least 9.7 per cent for 2022.

The report says: “The continuing impact of Covid-19 on Council services through additional expenditure and reducing income, alongside inflationary pressures on both pay and prices not seen since the 1970s due at least in part to the war in Ukraine, and the effect of the cost-of-living crisis on demand for Council services have now altered that outlook for the worse, and created a great deal of additional uncertainty.

“Recent years have also seen significant growth in demand for Children’s Social Care nationally which has also been experienced in Bradford. Challenges in recruitment and retention, and pressures in adult social care are also contributing to a situation in which Council finances are under considerable strain.”

It says the pressures in Children’s Services come from “continuing high cost of placements and reliance on agency workers.”

As well as a potential financial gap of £77m in the next financial year, the medium-term forecast warns of a £72 million gap in 2024-25 and £64 million in 2025-26.

Legally Councils must balance their books.

Authorities can dip into reserves if needed, but the report adds: “These £213m of additional costs would not be bridgeable by the Council’s reserves, and significant actions will need to be taken.

“This will either include additional funding from Government or partners, or significant reductions to Council expenditure budgets with consequent impact on local services.

“A large number of mitigations are currently being explored to reduce the forecast budget gap.

“It should also be noted that there are unprecedented levels of uncertainty, and the forecast gap will be subject to change as we become better informed about international issues, the national economy and cost of living crisis and the future of local government finance.

“The council will be lobbying government for additional funding and support sector campaigns regarding a sustainable level of funding and funding mechanism for local government.”

Bradford Council Leader, Councillor Susan Hinchcliffe, said: “Despite consistently delivering balanced budgets in previous years, the impact of spiralling inflation and rising demand has created a very challenging financial outlook.

“These pressures are compounded by repeated delays in national Government bringing forward promised reforms of Local Government finance which would deliver additional funding for Bradford District.

“While we are monitoring forecasts and taking mitigating action, the scale of the challenge is great indeed.

“We need to work closely together with partners to ensure that Council services supporting quality of life and economic growth for our district continue to be sustainable, and that resources are available to support vulnerable residents in the cost-of-living crisis.”