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Norwich City Council unveils plans for £70m of investment in new budget proposals

Published on Thursday, 11th February 2021

Despite the extremely challenging financial position, Norwich City Council’s cabinet last night discussed proposals to invest close to £70m of capital investment in homes, skills and vital city infrastructure as part of its budget plans for the next financial year.

This will form the first phase of a plan that will see the council invest £250m of capital funding over the next five years in the future of the city.

The council’s proposed budget – covering the period 1 April 2021 to 31 March 2022 – includes £54.6m of capital investment from the council, plus government funding of £25m from its Towns Deal Fund over the next two years. A further £1.5m grant for environmental efficiency measures has recently been confirmed, and this capital investment will be incorporated into the budget papers presented to full council later this month. 

Although the council’s responsible approach to managing its finances means that money is available to invest in homes and city infrastructure at the time when it is most needed, the pressure on the resources available to run vital day to day services remains extremely challenging, as a result of increasing demand and the ongoing impacts of the Covid-19 pandemic.

Leader of the council, Councillor Alan Waters said: “The city council continues to play a crucial role in tackling Covid-19 and supporting residents through these very difficult times.

“Local government will lead the country’s recovery from the pandemic, and I call on Whitehall to ensure that all councils have the resources needed to deliver services for the long-term, when the worst of the pandemic is over.

“Our prudent, planned approach and careful management of resources over the past decade, and our success in winning external funding, means we’re in a position to be able to invest almost £70m in the city next year.

“This includes investment to build homes, improve existing ones, upgrade the city centre, support new skills and jobs, along with introducing a range of environmental efficiency measures including electric vehicle charging points and retrofitting council homes. This budget demonstrates our ongoing commitment to deliver an ambitious agenda to support the city’s recovery.”

On top of the £3.1m of savings made this year, the council’s budget for next year includes proposals for further savings and income generation of £2m.

Despite the need to deliver savings, the council has worked hard to protect frontline services again next year and has avoided the need for service cuts.

However, the pressure on the council’s finances will continue over the coming years, with a further £11.8m needing to be saved by 2025-2026, due to the amount of funding provided to local councils being inadequate to keep pace with the demand for local services.

Next year’s budget, which will go to a meeting of full council on 23 February for final approval, includes a proposed council tax increase of 1.99 per cent for Norwich residents – an additional £5.36 a year, or around 10p a week, based on households in band D. This follows a budget consultation which saw 58 per cent of its 2,605 respondents agree with this proposed rise.

The council will continue with its commitment to a 100 per cent council tax reduction scheme – one of the few remaining in the country – to support those on low incomes.

Cabinet member for resources, Cllr Paul Kendrick said: “The city council has once again been able to present a balanced budget. A budget which, although extremely challenging, avoids cuts to vital frontline services at a time when residents need them the most. And, despite the ongoing pressure on the council’s budget as a result of a local government funding system which is not fit for purpose.

“Our budget projections show that we will need to continue to make savings over the years ahead – and that challenge gets harder each year”.

Budget headlines

The council’s proposed budget – covering the period 1 April 2021 to 31 March 2022 – includes investment in the city of almost £70m.

City council capital investment – £54.6m

This includes:

  • continued investment in our social housing: £18.5m will be invested in improving council homes, including new kitchens, bathrooms and window installations; £8.7m invested to improve communal areas, upgrade heating systems and install solar energy panels; with £2.1m invested in door entry upgrades and estate improvements. 
  • £19.5m of proposals to redevelop sites and provide new social housing.
  • £0.3m of investment in city parks to improve the football facilities, public toilets, and other facilities including paths.

External funding

This includes:

  • £25m of Towns Deal funding. This will go towards investment in skills and infrastructure through the creation of a digital hub, a digit-tech factory, and construction and engineering centre (which City College Norwich will deliver); as well as refurbishing The Halls. This capital investment will take place over the next two years.
  • £1.5m of grants for environmental measures, including rolling out electric vehicle charging points and retrofitting council homes to make them more energy efficient.

Revenue savings and generating additional income

  • Permanent savings and income generation proposals totalling £2m have been included in the general fund budget for 2021-2022.
  • Despite the need to deliver savings, the council has worked hard to protect frontline services again next year and has avoided the need for service cuts. Furthermore, the budget for 2021-2022 has been balanced without the need to draw down on reserves.
  • Pressure on the council’s finances will continue over the coming years with a further estimated £11.8m needing to be saved by 2025-2026 due to the amount of funding provided to local councils being inadequate to keep pace with the demand for local services.