At last month’s Cabinet meeting, council leader, David Pugh, delivered the Financial Report for Quarter Four (to 31 March 2011).
As we all know, due to the widely-reported ‘budgetary pressures’, the council had to reign in expenditure as far back as April 2010 (prior to the Government’s Spending Review). Some significant cuts to services were made last year, such as the closure of adult social daycare provider, Medina Centre, but it appears that savings were achieved too.
Year end underspend of £787,000
Cllr Pugh explained that due “to the considerable control methods” put in during the last financial year, 2010/11 ended with an underspend of £787,000.
He hailed this as a significant achievement, adding “It puts us on a good financial footing for further savings needed in the next financial year.”
Cllr Brown praised the back office staff for achieving such significant savings and put it down to good management and co-operative responses from the staff.
With every high comes a low
It wasn’t all cheers and back patting though as Cllr Pugh explained that had been some significant overspends in certain areas.
An overspend of over £4m in Adult Social Care was reported. If you take away savings in others services within the directorate, the net overspend came in at £3.047m.
It wasn’t clear what had lead to No indication was given to the members as to the reason for such a significant overspend.
The report went on to reveal that school transport had incurred additional costs of £0.592m, whilst children’s placements saw an overspend of £0.559m.
Added to that, parking income also had a shortfall of some £1.030m.
Strategy on expenditure of reserves
Making reference to the alternative budgets presented to full council earlier in the year, where it was suggested that funds from the general fund balances (ie. reserves) be used to plug some of the savings in the budget strategy, Cllr Pugh said that given the increase in the reserves, there “may be a desire in some quarters to make use of such funding to minimise further service reductions”.
He explained that this was a strategy that members would be willing to consider, but reminded members of the further reductions in funding from government that are expected over the next two years, with no anticipation of it going back up again.
“It would be imprudent to consider using such balances, unless for a one-off basis, given that it would need to be repeated from those funds in subsequent years.” he said.
He went on to say that the council would continue to monitor budget position and would be presenting a review to full council in September, in preparation for next February’s budget.
Brown warns members to remain prudent
Cllr Brown responded to Cllr Pugh’s presentation and praised those responsible for the back-office savings. He went onto say that the council “Can’t keep on doing the same thing over and over again. For every efficiency one achieves, by definition you reduce the amount of opportunity for yet more.”
He stressed the importance of not making over-optimistic assumptions that the council could keep on achieving more and more savings. “We must be be very prudent about those balances.” he finished.
The report presented to Cabinet members is embedded below for your convenience.
Click on fullscreen icon at bottom to view larger version
