South Gloucestershire and Wirral councils have warned of multi-million-pound budget gaps next year due to inflation and rising demand on services.

South Gloucestershire Council has said its budget gap is set to reach £29.3m next year, while Wirral Council is looking at £49m.

A South Gloucestershire Council report said the local authority was in a robust financial position with a four-year balanced budget through to 2026/27 earlier this year, based on £20m in savings identified in the previous year.

However, a series of cost increases have now put the council under growing financial pressure. For example, rising energy costs will add £2m and inflation is expected to add another £10-15m to running costs, with the nationally negotiated pay offer requiring the council to find an extra £6.4m each year.

Rapidly growing demand on services, including adult social care, means that the cost of delivering existing services is also likely to go up by £8.5m every year.

Leader of South Gloucestershire Council, Cllr Toby Savage, said: ‘We knew earlier in the year that financial pressure was building and our prudent financial management in recent years means that we begin this process from a position of relative strength, but an unprecedented storm of global events leading to the cost of living crisis, alongside rapidly increasing demand on council services, means we now have to look across the board at all service areas.

‘This is something that councils the length and breadth of the country are all doing and, whilst we are in a relatively stronger position than many, this will still include things that affect our everyday lives.’ Wirral Council has also announced that due to inflationary pressures they are planning for a ‘worst-case scenario of £49m’.

A council spokesperson said: ‘Earlier in the year the authority had been on track to bring forward plans for a balanced budget next year despite an expected gap of £14m, however, inflationary pressures and the knock on effects of global price rises have seriously impacted the assumptions utilised when compiling the budget for 2023-24. We are now planning for a worst-case scenario of £49m.’