Some “difficult and unpopular decisions” will need to be made to set future budgets, says the leader of a local authority.

Gravesham council has warned of the continuing pressures on its finances despite being able to set a balanced budget for the coming year.

Members voted to approve the budget for 2024/25 at last night’s (Tuesday) full council meeting.

They decided to draw £2.07 million from the local authority’s working balances which would see it fall below the recommended minimum level of £5.25m by the end of March next year.

However, councillors were warned this means they will need to find ways to reduce costs and increase revenue to prevent the council from being in a position where it has limited capacity to respond to significant events or emergencies.

It could also mean it might not be able to set a balanced budget for 2025/26.

Council leader, Cllr John Burden (Lab), said: “Over recent months the news has been full of numerous councils of all political persuasions struggling in the face of financial challenges, with a number issuing Section 114 notices –essentially a notification of having run out of funds to deliver anything but the services they are legally obliged to.

“Gravesham is not in that dire position, but we are acutely aware of the work that needs to be done to reduce expenditure and increase revenues to ensure we can set balanced budgets over the coming years.

“This will not be easy and there will be difficult and unpopular decisions that have to be made and made soon.

“But all of these will be made honestly and with the needs of our communities at the forefront of our minds at all times.”

He explained that the pressure on the council’s finances was largely driven by factors outside of its control such as temporary accommodation and higher energy costs.

Cllr Burden said the cost of providing temporary accommodation for those who find themselves homeless is causing the “most concern”.

The authority’s spending on this has risen by 661% over the past four years and in the last financial year, cost £1.8m against government funding of £408,000.

He added: “Our housing team is working on some imaginative and in some cases groundbreaking measures to reduce our reliance on expensive temporary accommodation.

“But the demand is such that for next year we are anticipating spending in the region of £2.8m to find temporary shelter for those who need it.”

Higher energy costs are the second major issue facing the authority, particularly in running Cascades and Cygnets leisure centres, Cllr Burden added.

The council provided around an additional £500,000 for the two centres last year but this is now expected to fall slightly.

Members also agreed to raise the Gravesham element of Council Tax for a Band D property by £6.57 to £231.03 – an increase of less than 13p a week.

Cllr Burden said: “This is also an increase of less than the maximum we are able to agree before a referendum is needed.

“It is also important to note that 58% of properties in Gravesham fall within Council Tax bands A-C, meaning they will be paying less than that.”

Around 11% of the total Council Tax paid by residents goes to Gravesham council with other authorities also taking a share.

He added that the new budget has been decided to continue to respond to the growing demand for services and maintain important services while being financially aware of the challenges ahead.

It includes a focus on enforcement activity to target fly-tipping and environmental crimes, creating jobs in the area, and projects to reinvigorate the town centre such as securing a new operator for Gravesend Borough Market amongst others.

The council is required to operate a balanced budget, which means that cash raised during the year will meet expenditure.