Council accountants have pulled off a pre-Christmas magic trick by making this year’s spending cuts nightmare suddenly vanish. Councillors were in despair in October when they learnt that just £2.2 million had been found towards the target of cutting back this year’s spending by £9.9 million.
Now the finance team is confident of making £6.6 million of savings and says the rest of the £9.9 million will not need to be found because the amount budgeted for capital projects has been massively overestimated while the council’s financial reserves are much healthier than expected.
Final figures for the end of last year are now available and show that the reserves reached £274 million, which was £13 million more than anticipated and comfortably above the minimum of £250 million which the council does not want to erode. They are continuing to perform satisfactorily this year.
On Wednesday head of finance Graham Johnston was able to predict at the Full Council meeting that the books at the end of this financial year would show spending substantially within the original target. Indeed, one likely scenario is that the council may underspend by as much as £8.7 million due largely to the number of projects delayed or not going ahead.
On the £29.9 million capital programme alone the lack of progress could see £10 million or more going unspent.
The story of being fooled by their own excessive ambition is a recurring one for the council which has begun many years scouring departments for savings, resulting in a cursory effort to find them in the sure knowledge that later in the year the failure to get capital projects off the ground would mean millions of budgeted spending did not go ahead.
There was some concern among members on Wednesday that they were only putting off today what will have to be done in February when next year’s greatly squeezed budget is set, complete with all the punishments resulting from the UK’s financial collapse. However Mr Johnston reckons that while there will be challenges and difficult decisions to take, the problem of finding staff to fill job vacancies is likely to be repeated next year, saving millions of pounds that the council will have budgeted to spend.