I’m sure you will have seen the headlines this week about the council’s finances. Our chief finance officer has issued a Section 114 Report which means that the council isn’t able to meet its legal requirement to deliver a balanced budget for this year.
On 21 November, the council’s Executive Board discussed a report on our latest financial position which highlighted that a significant gap in the authority’s budget remains due to issues affecting councils across the country, including an increased demand for children’s and adults’ social care, rising homelessness and the impact of inflation.
As we reach the halfway point of the year, the council is forecasting an overspend of £23.3m.
Past issues relating to financial governance which led to the appointment of an Improvement and Assurance Board, and an overspend in the last financial year have also impacted on the council’s financial resilience and ability to draw on reserves.
It’s important to stress that the council is not “bankrupt” or insolvent and has sufficient financial resources to meet its current obligations, to continue to pay staff, suppliers and grant recipients in this year.
A meeting of all councillors will need to take place within 21 days to consider the report. Until councillors have met, the spending controls already in place will be further tightened with spending immediately stopped that is not already contractually committed or otherwise agreed by the Chief Finance Officer.
A dedicated page on the council’s website will be regularly updated with key information relating to the report and the council’s response.
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