Councillors received the latest monitoring report on the council’s budget up to the end of December 2011, when the Policy & Resources Committee met on Thursday.
The Head of Finance reported how services are responding to the Council’s long-term financial strategy which recognises the increasing pressures on budgets over the next five to ten years.
The report shows an underspend of almost £11 million, which accounts for around 2% of the council’s budget and reflects the positive way services are responding to the challenges ahead without a material impact on service delivery.
Underspends are being reported across a range of areas. Capital financing charges and interest payments will underspend by £1.7m, due to unavoidable delays in the capital programme and favourable borrowing conditions.
Waste disposal is forecast to underspend by £1.1million through reduced publicity costs and waste being transported by the council rather than by a contractor. Former zero waste fund money is unlikely to be used this year and delays have been identified in developing the Household Waste and Recycling Centres.
Internal transport will underspend by £797,000 due to savings in leasing costs and delays in the purchase of small items of vehicles and plant. Economic development will underspend by £899,000, largely due to holding funds for specific projects on Business Gateway, the Regeneration Fund and Macduff Town Centre Improvement Zone which will now be spent next year.
Older People Residential Care will underspend by £903,000 due to the introduction of revised working patterns for staff and an increase in charges to clients. In addition, delays in opening a new care home in Stonehaven have meant that staff costs are not required in the current financial year.
Older People Care Management is forecast to underspend by £698,000 primarily due to reductions in payments to agencies as well as an increased forecast in income from clients.
The building repairs and maintenance budget is expected to overspend by almost £1million due to pressure of maintaining the council’s buildings. This has been recognised by councillors and additional funding agreed to support this work in future years. Cross-service savings of almost £1million are unlikely to be achieved during this financial year and work is on-going to find alternative savings through procurement activity.
Provision is being made through the budget process to ensure the council maintains teacher numbers and manages changes to teachers’ terms and conditions and the teachers’ induction scheme.
In the report, the Head of Finance advises that the underspends are largely one-off, rather than recurring savings and that decisions taken throughout the budget-setting process reflects the approach to the longer-term planning the council has adopted where further cuts to services can be avoided, or at least minimised by the re-investment of current year’s savings.