Northamptonshire County Council will come in under budget for its most recent financial year, but is already facing some stumbling blocks in repeating the feat for the upcoming year.
The authority has declared recently that it had a £4.46million underspend in the last 2018/19 financial year, an improvement of more than £3million on what it had reported earlier this year.
It emerged at a cabinet meeting on Tuesday (July 9) that the bulk of the money the authority is accounting for to bring in the underspend is funds given to the authority by developers for road repairs. The finances have not as yet been approved by the auditors.
Councillor Longley told the meeting: “Within that £4.46million underspend we have included £3.1million of schedule 38 monies. This is money you get from developers to pay for long-term repairs of roads. That is a bit of a debatable argument here at the moment, either way, whether we include that after the audit or not, it’ll be the right side of the line.”
Asked a further question by shadow finance holder Councillor Mick Scrimshaw, Councillor Longley said: “You have two choices. The cash is in the bank. You can either put it in the accounts as we have done, or leave it out and put it in progressively over a number of years.”
However, despite the underspend last year, there are already some worrying signs of the year to come ahead in 2019/20.
The cabinet heard how an initial forecast shows an overspend of £5.8million for the upcoming financial year, a large chunk of which is due to pressures on children’s services.
Councillor Longley added: “We have got a long way until the year end, but we are trying to put in forecasts that are realistic and prudent. We’re projecting an overspend of nearly £6million, the bulk of which is in children’s services. It means we have got work to do, but we intend to do it and I’m very confident that our officers are up to the mark. We have started looking at ways we can combat it.”
But Councillor Scrimshaw said the figures proved that his party was right to cast doubts over the proposed budget when it was approved in February, despite the main Labour opposition voting against it.
Councillor Scrimshaw said: “There’s been a history at NCC of monthly cabinet reports projecting overspends early in the financial year, with time throughout the rest of the year to take mitigation.
“But what’s different now is that the current financial position is not usual, there’s very little room for flexibility. In the past we may have had the opportunity to deal with overspends, but there are fewer options now.
“What’s also worrying is that this doesn’t come as a surprise. Some of us said at the time of the budget setting that it was not robust enough and would start falling apart very early on in the year, and that seems to be happening.
“We spoke of how the forecast in demand of children and adult social care couldn’t be relied on, and that some of the £40million saving proposals were not thought out properly. Those were the reasons we felt unable to support the budget. Today, we see that it is exactly these issues that are causing problems.”