Last week was the regular meeting of Bury Council’ Cabinet. A key point on the agenda was Bury Council’s financial outlook, which at present shows the Council heading for a £6.4 million overspend in the current financial year.

This summary actually hides an even more worrying picture, with overspend in various areas totalling over £10.5 million but addressed partially met by savings or other income elsewhere.

The Council has drawn up an ‘Action Plan’ to partially address the issue (recruitment freeze, no new spending, etc etc), but this only amounts to around £1.5 million. The remainder of the overspend would need to be covered by spending the vast majority of the Council’s ‘free reserves’ (roughly £5 million, leaving the council with under £1 million left in ‘free reserves’ at the end of the year.

The point we raised at the meeting was whether the Council was ‘too optimistic’ when it set the budget back in February. Much of the overspend relates to:
– changes in the way services are delivered (e.g. changes are either taking too long to happen, or they are not delivering the savings that were expexted)
– income not as much as expected (for example income from parking, from leisure centres, from comercial rents are all down on budget)
– demand driven areas, such as adult care, or children in care, where costs are expected to be over budget.

The impact of this projected overspend could well be very significant. What it means for the Council is that for next year (2017-18) the starting position is that an extra £6.4 million of cuts will need to be found (it was going to be £11 million, now add £6.4 million to that). We are very worried on the impact this will have on services for residents.

A full copy of the report is here.