DENBIGHSHIRE’S finance officers say the council is nearly £2.4m in the red in the current financial year – and the situation could get worse with rising energy costs and staff pay increases.
At a meeting this week, cabinet members were updated on the council’s financial position for 2023/24.
Whilst Denbighshire’s budget is £250.793m, the council is expected to overspend by £2.395m.
Last month the overspending was predicted to be £3.348m, but this figure was reduced due to income from grants.
The report states that council services will now need to continually review their expenditure and income to mitigate the impact of the overspend.
Cabinet members were told there were further unknown risks including unresolved pay settlements and energy costs and inflationary pressures.
Head of finance Steve Gadd explained.
“If you remember the monitoring last month was showing a £3.3m overspend, we’re now showing a £2.4m overspend. So it’s just come down a bit. But that’s not through any reductions in costs,” he said.
“We actually received a grant that we weren’t expecting for some of the costs around homelessness to do with the refugees, and we weren’t expecting the Welsh Government grant to cover these particular items. But it does, apparently, so we put that in as a projection, and that’s I think about £700K.”
But Mr Gadd also explained there could be more pressures unaccounted for to come.
“There are a number of risks at this early stage in the year,” he said.
“A number of things don’t really come until after the (summer) recess and those around school transport, those sorts of costs. A number of contracts are re-let in September.”
He went on to explain that energy and staff pay were the two areas that could cause the most problems for the council’s budget.
“We think the (energy) costs have come down slightly from the highest projections after the budget was set, but even though we’ve come down since March, the projections could still be higher than what we put in the budget.,” he said.
“And the other one we are monitoring closely is the (staff) pay, which obviously is still up for discussion. Unions are currently discussing their way forward, so we’ll see where that goes. You probably won’t get a resolution until September/October time.”
He added: “The current offer on the table is more than I have in the budget, but I do have contingency cash to fund that additional amount. Whether it will be enough to fund any revised offer is a different question.”
The overspending is despite the council finding £8.172m of ‘efficiencies in the last budget, including operational savings of £538K and schools being told to plan for 1% cuts amounting to £816K
The report also outlined the council’s revenue budget and savings as agreed for 2023/24, providing a summary of the capital plan, housing revenue account, and housing capital plan.
The cabinet agreed to note the budgets set for 2023/24 and progress against the agreed strategy.
