West Berkshire council say they're more than £8m over budget
The council is blaming inflation
Inflation has put West Berkshire Council £8.1m over budget.
The council says it is now on a ‘watching brief’ as the cost of living hits its cash reserves.
Chief executive Nigel Lynn says he is now instructing officers to come up with solutions to put to the council for the next quarterly financial report.
He refused to comment on whether this could mean a cut to council services.
The 2022/23 budget of £144m was set in March 2022, using £140m of revenue funding and £4m of reserves.
During the budget build, inflationary pressures were identified in demand-led services.
But it used an inflation figure of 3.5 per cent in modelling. Inflation is now at 10.1 per cent.
The council says not all of these pressures were built in, with some being put aside in earmarked reserves to be called on should the pressures arise.
After factoring in the reserves that were set aside to support this, the forecast overspend is now £4.6m.
Adult Social Care (ASC) has a forecast over spend of £4.1m, reducing to £1.9m after use of reserves.
They say there are higher client numbers – 1,804 compared to the 1,734 modelled – with higher levels of new requests for support.
A report to the Overview and Scrutiny Committee says there is an increase in the cost of new client care packages, due to current inflation, adding that there is lower occupancy in the council’s own care homes, resulting in more people placed in externally commissioned beds – costing more.
Children and family services is projecting a £2.5m overspend, with increased agency staff costs marked as the reason.
Council accountants say car parking income has significantly reduced compared to pre-pandemic levels, leaving it £325k short.
And it says solar energy is not achieving the expected levels of income based on current output of the installed solar panels.
But the council has saved money – £250k from reduced mileage as council workers have switched to a hybrid working model.
The council has also got £300k from a recruitment lag.