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Council likely to overspend £4m in financial year
HEREFORDSHIRE Council is on course for a near £4 million overspend on its 2012/13 budget by the end of the financial year.
That sum represents around three per cent of the council’s £143m revenue budget and may have to be covered by its remaining general reserves.
People’s services remains the biggest cost concern currently projecting a net overspend of £6.8m – including an overspend of more than £8m on adult social care alone.
Latest figures show that, as at the end of January, the council’s overall revenue budget position showed a projected overspend of £3.9m by the end of the financial year – or 2.7 per cent of the council’s £143.4m revenue budget.
Any year-end overspend on the revenue account would have to be met largely from the general reserve, the balance of which was £6.1m as at March 2012.
As at April last year, the council held £13.5m of earmarked reserves which cannot be transferred to the general reserve. However, the requirement for other reserves is being reviewed as part of the council’s financial recovery plan.
Under the current medium term financial plan, any use of reserves needs to be “paid back” as part of the 2013/14 budget.
In addition to the revenue overview, the forecast outturn spend on capital schemes is £41.9m compared to the original budget of £44m. The overall position is eased by projected savings of £780,000 net on borrowing and investments.
A 2012/13 budget agreed by the council in February last year reflects the overall savings of £10.8m required to meet the reduced funding levels from central government and budget pressures, particularly on adult social care.
The recovery plan includes actions such as the lockdown of discretionary spend, use of unspent grants, review of reserves, reviewing use of agency staff and vacancy management.