Big-money budget boost as £13m surplus is revealed £10m going to reserves

South Lanarkshire Council is set to run a budget surplus of almost £13.5 million in 201920.

A report to the council’s executive committee revealed its healthy financial position on Wednesday, January 29 – just over a month after a consultation was launched into proposed cuts of more than £10 million next year.

However, some under-pressure resources – including social work – are set to overspend on their individual budgets.

The executive director for finance and corporate resources, Paul Manning, told the committee that the council’s finances had improved since December.

He added that a probable out turn exercise was completed in November and December to work out the estimated year end position.

This resulted in an “improvement in position” by £1.5 million.

Mr Manning said that the main reasons for the underspend were because the council “didn’t anticipate” just how much more council tax would be collected from new homes, that they had “better returns” than expected on council tax arrears and that more would be collected from loan charges than previously thought.

The total underspend for the year is set to be £13.4 million, of which around £10.75 million will be transferred to the council’s reserves for use in future years.

Conservative group leader Councillor Alex Allison (Clydesdale East) was concerned that some of the council’s departments were transferring money to the council’s reserves only to leave that department with an overspend on its budget.

Cllr Allison asked if “residents were paying for money going into reserves and not for services” after the council tax rate was increased last year.

He added: “The £13 million – and I use the term loosely - is it free money?”

Mr Manning said that “local authorities don’t live their lives in a way that ties up nicely at the end of the year”.

He added: “Is it free money? No, other than the £1.5 million that it has got better.”

Mr Manning also said that the council’s spending would be “tied up when we go through at the year end” but refused to go into more detail in a public forum.

Labour group leader, Cllr Joe Fagan asked if the council had “any indication” that the savings proposals for next year would need to be revised now that the budget timetable was clearer.

Mr Manning said he had asked the Scottish Government what the grant settlement was likely to be but the only reply was that the council would “get a letter on February 6” with the details.

He said: “It is going to be in everybody’s interest to be informed as we get it.”

Cleland Sneddon, South Lanarkshire Council’s chief executive, added: “It will take officers a number of days to go through that, it will be some time the following week.

“If there are any further consequentials as a result of the UK budget, we will get further information.”

Councillors are set to decide the budget for 2020-21 on Wednesday, February 26, after the Scottish Government has set a draft budget but before the UK Government has decided the budget.