South Tyneside Council facing £5.3million overspend as inflation bites
Council chiefs in South Tyneside have warned they are predicting a £5.3million budget overspend this year due to issues such as inflationary pressures impacting utility costs. v.1
Council chiefs in South Tyneside have warned they are predicting a £5.3million budget overspend this year due to issues such as inflationary pressures impacting utility costs.
It came as the latest meeting of the local authority’s cabinet received a budget monitoring report covering the period from April to September 2022.
Councillor Joanne Bell, lead member for governance, finance and corporate services, outlined how South Tyneside Council’s 2022/23 revenue forecast is estimating a £5.34million overspend against their budget for the year.
Speaking at a meeting on January 4, she said this is based upon the net expenditure for the first six months of the financial year and is down to several pressures facing councils across the country.
Cllr Bell said: “This projection takes into account current high levels of inflation especially around our utility costs.
“Collaborative work is ongoing to identify mitigating service savings to address or reduce these levels of high pressures.
“The main areas of spending pressures are around children’s and adult’s social care, regeneration and housing and learning and early help.”
She added: “The pressures identified in social care reflect similar pressures being faced by many councils across the country, we are not unique in this area.”
A report to councillors noted there may be further changes during the year as projections become more accurate, with the position “rigorously monitored” through monthly reviews.
It added the effects of the Covid-19 pandemic “particularly through increased social care demand” continue to impact some of the council’s budgets in 2022/23.
Reports added reserves will be utilised “as planned” during the financial year, while the council’s medium term financial plan will support longer term stability by taking account of issues and looking at potential new approaches.
As of March 31, 2022, South Tyneside Council had £68.578million in reserves, however almost £43million were already earmarked for use.
Cllr Bell said: “A significant proportion of our reserves are committed to costs which we incur in future years, leaving modest sums to cover unanticipated costs.”