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City of York Council going £6m over budget
CITY leaders in York face missing their budget by £6 million this year as they try to make sweeping savings.
A new financial report for City of York Council has shown the predicted overspend at the end of June was £1.6 million more than at the same point last year, and opposition councillors say the ruling Labour group is “losing control” of the city’s purse strings. The council needs to save £10.75 million in 2012/13.
Figures going before the authority’s cabinet next week show £1.4 million of savings earmarked for 2011/12 – when the council had to cut £21 million – were missed, although it managed to balanceits books. Finance chiefs have warned the adults, children and education directorate alone is currently heading for a £3.67 million overspend, as demand for care services soars.
They said York’s adult care bill could rise by 33 per cent within eight years and this area could account for half the council’s spending in 2019/20, even if council tax bills increase by two per cent a year.
The report says the city and environmental services directorate faces “financial pressures” of £1.3 million, partly due to income shortfalls for commercial waste and parking, and “compensatory one-off savings” need to be made which will not take effect for two years. The communities and neighbourhoods department has a predicted £963,000 overspend, having failed to make £844,000 of projected savings in 2011/12.
At the end of last June, the council forecast a £4.3 million shortfall for 2011/12. Finance officers said this year’s predicted £5.937 million overspend was “not entirely surprising” because of reduced Government funding, low council tax levels and demand for services. The council’s gross 2012/13 budget is £122.2 million.
Julie Gunnell , cabinet member for corporate services, said the council had “endured millions of pounds of Government cuts over a short period” and continuing funding reductions, but met its budget last year.
She said: “This is the first quarter report and, as in previous years, it does show pressures, particularly where there is growth such as adult social services and looked-after children.
“As with last year, we are continuing to monitor and take the necessary mitigating action while still supporting the council’s priorities.”
Ian Floyd, the council’s director of customer and business support services, said the authority’s two-year budget, agreed earlier this year, included savings which were “not easy for any organisation to deliver.”
He added: “We are working hard to ensure the financial pressures we currently face are mitigated to remain within budget.”
Liberal Democrat leader Coun Carol Runciman said: “We are dealing with a Labour cabinet which appears to have lost control of the council’s finances and a £5.9 million predicted overspend is deeply worrying.
“The savings promised in the budget are not being delivered and more than £1 million of savings from last year have not been achieved.
“Labour need to get a grip on things.”
Conservative councillor Chris Steward said he was concerned the council’s financial reserves were being kept at “a bare minimum” and borrowing was increasing.
He said: “This will mean tomorrow’s York residents, as well as today’s, paying for Labour’s poor spending choices”.
Green group leader Coun Andy D’Agorne said: “We are a low-spending council and savings become harder to find with a smaller pot of money to start with, so these predictions are a big concern”.