Councillor questions council overspend

A senior councillor has asked how a council is bringing its services that have been on course to overspend by almost £4.5 million under stricter financial control. 

Monmouthshire County Council has had to use £5.5m from reserves to prop up day to day spending this financial year with figures showing its overall revenue budget deficit – the difference between the amount it spends and its income – increased by £160,000 in a month to £284,000. 

Councillor Alistair Neill, who chairs the authority’s performance and overview scrutiny committee, asked in light of the deficit having increased: “What basis do we have to say we are moving towards more sustainable services when running towards a projected £4.5m overspend?” 

The Conservative said the overspend, with adult social care at £3.1m accounting for the largest share, was being managed through use of reserves and treasury management totaling £3.3m. 

He said: “It’s like a household that’s continuing to overspend, using up all its savings, using money from relatives to manage to keep going and selling off what it has got to plug the hole. The fundamental problem appears to be to that we are still very significantly overspending on services to a rate that appears to be £4.5m nearly.” 

The councillor said he was concerned that use of reserves meant the council would no longer be able to use those funds to enable it to reorganise and redesign services so they are more affordable. 

Cllr Ben Callard, the Labour cabinet member for finance, said the £3.3m figure included grants, which is a form of income for the council, for specific services which are outside its core funding settlement from the Welsh Government. 

He also said the budget the cabinet has proposed, which includes a 7.5 per cent council tax rise from April and £8.4m in cuts and savings, makes no call on reserves as he said it is recognised they are at the “minimum level”. 

The council’s deputy chief executive, and senior finance officer, Peter Davies said he was “pleased” the budget recovery plan agreed in response to the decision to further support the current budget through reserves, was “working” and said the £160,000 increase in the deficit had to be seen in the context of council’s overall budget. 

The committee was told spending controls include a panel to examine all social care costs, though there has been an increase of people entering residential care, while it has been been announced the Welsh Government is increasing, to £3.20, the amount it pays for each school meal which all primary school children are entitled to at no cost.