Council predicts £6.7m overspend on budget
HALTON Borough Council has predicted it will overspend on its budget this year by around £6.7m if no action is taken in the coming months and faces the danger of its financial reserves becoming diminished.
The spending position has been revealed to the local authority’s executive board as part of a report detailing the first quarter of 2019/20.
From April to June, the council spent over its budget by £1.247m and based on current patterns, the local authority covering Runcorn and Widnes will have spent £6.772m more than what was budgeted for by the end of the 12 months.
The report suggests if overspends are not reduced, then the local authority’s present general financial reserves could be ‘fully consumed’, with funds having to be released from elsewhere to restore it.
It said: “Unless the projected overspend is reduced and net spending brought back into line with budget as far as possible, the General Reserve will be fully consumed and impact negatively on the financial sustainability of the council.
“The level of earmarked reserves will continue to be reviewed on a regular basis and surplus funds released to the General Reserve.”
For this year, budget saving plans of £9.25m were given the green light and the value of permanent savings totalled more than £4.4m, with a further £1.75m worth still being implemented but have not yet been allocated to specific departments.
Three council departments have a forecasted ● overspend of more than £1m by the end of March 2020, with the Children & Families one predicted to be in the region of £4.7m.
The borough’s Capital Programme has also been revised, with spending in this area totalling £6.4m by the end of June – 98% of the £6.5m allocated to it at this stage.
The programme, which includes projects across both Runcorn and Widnes, is now anticipated to cost £36.8m by the end of the 12 months period.
The report added that overall the Mersey Gateway has ‘no impact’ on the local authority’s budget.
Councillors have been advised to recommend that all spending continues to be limited to ‘only absolutely essential items’, that council departments seek to implement budget saving proposals as soon as possible, and strategic directors of various departments advised to take ‘appropriate action to ensure overall spending is contained as far as possible’ within their individual areas.
The report added: “There are a number of financial risks within the budget.
“However, the council has internal controls and processes in place to ensure that spending remains in line with budget.”
The report will be discussed at a meeting today, Thursday, September 19.