Millions of pounds set aside to deal with inflation in the East Riding
The County Council says it's to absorb spiralling costs as staff shortages hamper services
East Riding Council has set aside £7m to cover the rising cost of energy, fuel and other outgoings amid warnings staff shortages are hampering services.
East Riding Council’s Cabinet heard the £7m came from £15m not spent last year, in part due to salaries for unfilled authority and social care jobs going unpaid.
Julian Neilson, the council’s head of finance, told the cabinet £4.4m would also be used from the savings to support struggling local households as the cost of living crisis deepens.
Council leader Cllr Jonathan Owen said he hoped staff shortages which led to the underspend would be a one-off during a very difficult and unpredictable year.
It comes as a report to the cabinet stated the £7m set aside for rising costs may also be used to cover unforeseen pay hikes for staff.
The report added staff recruitment and retention problems were thought to be temporary but it warned it could continue into the current financial year.
The report stated: “Since the 2022-23 budget was set in February 2022, the UK economy has experienced exceptionally high levels of inflation and increases to the cost of living, with the consumer price index reaching a 40-year high of 9.1 per cent during May.
“Consequently, we are likely to see increases to our staffing, energy and fuel costs which are significantly higher than those predicted in the original budget.”
Some £1.6m from the £15m underspend is due to go towards the council’s Adult Social Care Change Programme after resources from it were diverted to deal with coronavirus.
Staff shortages in adult social care meant the council spent £1.3m less on salaries, due to difficulties and delays in filling recently created posts.
The report stated adult social care was facing unprecedented pressures in home care and uncertainty over the demand for residential care.
The council’s Capital Investment Fund is set for £2m from the £15m to fund projects including a Special Educational Needs and Disability (SEND) strategy.
The strategy includes attempts to meet a shortfall in housing for people with complex needs in the East Riding.
The report also stated the council was currently on course to spend £2.2m less on pay hikes following national negotiations in March, after budgeting for 2.5 per cent increases.
The talks settled on a 2.75 per cent hike for the lowest-paid workers and 1.75 per cent for everyone else.
But the report stated the eventual pay settlement for this year would likely be higher given inflation.
The cabinet also approved transferring £9m of Government compensation to cover business rates relief to a reserve to offset a deficit in collections last financial year.
Councillors heard officers had managed to save 98 per cent of its targeted cut backs.
Cllr Owen said officials did an excellent job reaching 98 per cent and that he was not worried about the remaining 2 per cent.
He added the current economic climate meant officers had to park the £4.4m earmarked for the cost of living crisis to help the most vulnerable.
The leader said: “This is a very difficult and unpredictable year, the council’s financial position is a result of that.
“We have underspent by £15m but because of staff shortages it means that we can’t fully deliver the services we’d want to.
“I have to stress that this is hopefully a one off and won’t be repeated every year.”