A report to the authority’s cabinet yesterday revealed that a Period 1 finance report was showing an ‘adverse variance’ of £4.34m, prior even to the replenishment of the council’s General
Fund and reserve balances that were raided last year to set a balanced budget.
The cabinet papers say that such a variance normally ‘would not be a cause for alarm at this stage’, but that the county council’s financial situation was ‘not in normal circumstances’.
Cabinet member for finance, Councillor Michael Clarke, said: “I’m extremely disappointed in the events that have allowed this to happen so early on in the financial year.
“We are determined to match expenditure with income. We must save, save and save more given the critical situation the council is in.”
At the meeting on Tuesday afternoon, at One Angel Square, the county council’s cabinet instructed officers to identify options for in-year savings of £8.4m at a minimum, and ideally savings of up to £20m for consideration when the Period 2 finance report is discussed.
The Period 1 finance report provided a summary of the financial risks and a forecast for the 18/19 financial year based on expenditure during April 2018.
The council ended the 17/18 financial year with more than £70m of unplanned expenditure, and the council is still being advised to replenish reserves to the tune of £12m for its General Fund, and £1m for an insurance reserve.
Speaking about the cabinet’s decision to instruct officers to find savings, Lib Dem county councillor Chris Stanbra said: “It does beg the question of why cabinet members don’t have any proposals.
“I would expect the leaders of this authority to have some proposals, not just to sit back and say ‘officers, tells us what we can do here’. I think that’s slightly disappointing.”
But Councillor Clarke said: “The language we have used is to ensure that we cut our cloth. The language is strong because we have our backs to the wall.
“We require sustainable solutions, which we are having to do with very few options. We don’t have the luxury to raid reserves or dip into other pots.
“We will be making some unpopular proposals, but we have said we would not shirk difficult situations.”