Overspend reduced at county council but concerns persist over remaining £11m savings

The latest finance monitoring report, which will be discussed by cabinet next Tuesday (January 15), shows that the forecast year-end position is currently an overspend of £11m. It’s down from the £30m overspend forecast in July, when the council issued a second section 114 notice banning new expenditure. And it’s a further improvement on the £15.6million position reported last month.

A stabilisation plan introduced in October has already saved £7.2million, but a traffic light system of green, amber and red assessing risk shows that £10million of further savings in the plan carry an element of risk, while an additional £2.6million is unlikely to be delivered at all.

The authority’s leader, Councillor Matt Golby, said: “Clearly we are not out of the woods yet and we simply cannot in any way become complacent as there is still a lot of work to be completed. But what is clear is that we are now firmly on the right path.“Since July we have worked tirelessly with our new management team and the commissioners and we have made solid progress to close this gap. But we are still short and we must redouble our efforts if we are to further reduce this gap and end the financial year in a balanced position.”

The reduced overspend has been greeted as good news by Labour councillor Mick Scrimshaw, who chairs the overview and scrutiny committee. But he remains concerned over some of the savings that have yet to be realised.

He said: “Any move to close the gap is clearly a good thing, depending on how they have done it. There are still questions over the effect this may have for service users. That there are still amber and red savings is of concern, but it’s not the greatest concern in that the green savings are done and dusted. There may still be amber savings that there is a genuine belief will be recovered. That is where scrutiny will come in and clarify, as the devil will be in the detail.

“The other question is asking how these savings are being achieved. Are they sustainable or are they one-off accountancy methods? I welcome that we are getting closer, although if it was going the other way we would have some major concerns.”

One of the largest chunks of the stabilisation plan savings is £7.8million to be realised from the council tax base by the district and borough councils.

Concerns have been raised privately by a number of the local councils as to the legal validity of the scheme, and whether the sums expected by the county council can be met. In public, Daventry District Council leader Chris Millar had criticised the ‘fantasy numbers’ involved with the scheme, saying there would be ‘some big gaps to find’.

Councillor Scrimshaw added: “It has always been questionable and the district and boroughs have raised this themselves. We are told by the commissioners that an agreement will be reached, but until that is in black and white it’s a concern because it’s a big chunk of the stabilisation plan and the savings overall. And is there a Plan B if there is a need for flexibility on it? We are in January, so there’s not long left in this financial year at all.”