Huge Council underspend

Council meeting 20/7/11

I am intrigued and somewhat taken aback by the financial outturn figures for 2010-11.

I think the main directorates are to be congratulated:

* Adult & Community Services has come in to within 0.3% of budget, a huge budget of £132m

* Business & Environmental Services is within 0.6% of budget

* Childre & Young People's Services within 1.5% of budget

All within any sensible margin of error.

But then:

Chief Exec’s 8% underspend

Finance and Central Services 17% underspend

Corporate Miscellaneous 23% underspend and that with a curious contingency, obviously unspent of 1.3m

So we end up with an overall underspend of £16.5m. There has clearly been some squirreling away here, notwithstanding government cutbacks.

Oh, and then there is the Area Based Grant (ABG) with another £1.85m underspend, and of course a capital carry forward, i.e underspend against the original plan of £7.8m

If I was one of our dedicated voluntary organisations, which have been squeezed until the pips squeek, or indeed one of those irate library campaign members I would be, to say the least, gobsmacked.

As a result of these underspends the county reserves have increased to £106m from £84m last year. I accept the oft-repeated mantra that reserves can only be used once and therefore shouldn’t be used for revenue expenditure. However, there must be a host of opportunities for one-off expenditure that would alleviate the present economic climate.

And there is a limit to which one can argue that the reserves have to be so large because they cover lots of different areas of expenditure – they are not all going to fail together; insurance companies don’t carry enough cash for all their customers to claim at once. They take a more realistic view and so should the county council.