Early forecasts for the new financial year show that the council has currently identified around 60 per cent of £62.5million worth of targeted savings for this year – but is still grappling with a £24m budget gap.
The council says a large number of identified cuts are now deemed “undeliverable” in the current financial year, while updated forecasts predicting higher demand for services mean the authority is now facing a possible estimated overspend of around £38m at the end of the 24/25 financial year.
That could be met by existing reserves – but if extra savings cannot be found council coffers risk dropping to ‘perilously low’ levels, although the authority has stressed that it has time to correct course.
“In overview, the current position indicates a potential spend over budget of £38.5m. This is not acceptable or sustainable and requires urgent management intervention in all portfolio areas to secure corrections,” said the report by the council’s finance chief James Walton.
“While it is inevitable that not all savings can be delivered exactly to the value planned, there are several areas where further work to improve the forecast can be progressed.
“It remains early in the year, and the data upon which the forecast is prepared is more accurate than last month, but the estimated position through the remaining months of the year is not yet certain.
“Importantly, sufficient time remains to enable management action to be put in place to materially improve the forecast. This is an urgent requirement.”
The figures were released as part of new financial reporting measures aimed at identifying budget pressures early on in the financial year, which sees the authority now produce a monthly monitoring report. Previously, the figures were reported every quarter.
According to the report, social care costs are set to be around £3m higher than expected, while current estimates indicate unforeseen budget pressures of around £11.4m in other portfolios.
Of the outstanding £24m cost savings still to be found, around £12m of general efficiency savings remain outstanding, while plans to save £3m in ongoing maintenance costs by selling off council property remain on the drawing board.
Speaking to the media yesterday (July 8), council leader Lezley Picton said the council’s financial position remained “exceptionally challenging”.
“These are decisions which we have to make and we have no choice. This year is about survivability,” she said.
The report will be presented to the council’s Transformation and Improvement Scrutiny committee on Monday, July 15.