Dorset Council’s budget gap could be as much as £40 million in four years’ time.

The medium-term forecast is based on increasing income from council tax, a small rise in business rates and a reduction in other grants to the council.

This year’s balanced budget, which will be approved next week, allows for an overall rise of 5 per cent in council tax – maintaining the county’s position as one of the most expensive for council tax in the country.

Three per cent of that rise will be for the social care precept.

The changes will mean Band D properties paying to Dorset Council, the police and fire and rescue service £2,112.85 a year. Town or parish council precepts, which vary widely, will have to be added to this.

A council report shows that the problems are likely to get worse with a projection of council spending over the next five years showing the council’s budget needs growing from £313m to £381m by 2025-26, £294.3m of that from council tax, £42.2m from business rates and £2.5m from other grants.

The council says it will continue to squeeze savings from the reduction of six councils to one, pointing out that it has already saved £10m on pay alone by the change to unitary status. It hopes to save another £3m from converging systems, processes and structures together with increased income – as well as a further £3m from “improved supplier and contract management, and procurement.”

The report, which goes to full council for approval on February 16, warns that peering into the future is not an exact science: “Whilst financial projections are based on realistic assumptions, known demand and well-formed models, some budgets are subject to a degree of estimating error as actual expenditure can be determined by factors outside the council’s control, for example demand for provision for adults with complex needs. Some activity is also subject to much more volatility and things can change very quickly and unexpectedly.”

Within the 2021/22 budget is a saving on office property costs of £672k which includes for the consolidation of staff within County Hall from offices in Dorchester including South Walks House and Princes House together with the termination of leases at Allenview House, Fernhill and Lynch Lane, Weymouth.

A paper on the Dorchester office estate and options for future use is due to be considered by Cabinet in April 2021 with a recognition that many staff will not return to offices full time in the future.

It will acknowledge that disposing of property in the current economic climate is not likely to get the returns it once might have done and other uses may have to be found for some buildings.