Northampton Borough Council has projected that it has overspent its 2018/19 budget by £732,000, latest financial papers have revealed.
The demand on temporary accommodation had the biggest impact on its general fund budget, with the council having to spend £1.2million more than it had anticipated at the start of the financial year.
And the changeover of the environmental services contract to Veolia in June 2018 also contributed heavily to the overspend, with extra ad hoc works and legal costs in association with the previous contract all totting up extra.
The council did underspend in five of its eight service areas, but the large losses accumulated in housing and wellbeing meant that the council will have to find cash from its reserves to plug the gap.
A full detailed breakdown of the overspend will be presented to members of the borough council’s cabinet next Wednesday (June 12).
The report, from chief finance officer Stuart McGregor, states: “Within housing and wellbeing there was an overall overspend of £1.24million. This is due to pressures resulting from the increased demand in temporary accommodation. This pressure was forecast during the year, but was partly offset by additional homeless grants received from central government in March 2019.
“Within customers and communities there was an overall overspend of £488,000. This was mainly due to an overspend of £312,000 on the environmental services contract and its management. This related to additional ad hoc works; legal costs; and costs of a risk share mechanism reflecting lower sales proceeds of recycled materials. This was partially offset by performance deductions relating to the old contract.”
Mr McGregor also highlights some of the service areas where the council came in under budget. This included the chief executive office, where a staff restructure saw the council save £153,000.
The biggest underspend was in the planning department, which came in £497,000 under budget. Just over £200,000 of this came from additional planning income, and savings on vacant posts and professional services. However, £252,000 of those savings – related to the Local Plan Part 2 – will be carried into the 2019/20 budget.
The borough council has reserves for its general fund of just over £25million to mitigate against any service risks.
Meanwhile, cabinet member for finance Councillor Brandon Eldred told full council on Monday (June 3) that the authority’s finance team is close to completing the Statement of Accounts for 2017/18, and is making progress on closedown for 2018/19.
Asked by Labour leader Danielle Stone whether auditors would report that public funds had been used efficiently and proved ‘value for money’, he said: “I haven’t seen the final report, but maybe that will come back positive for us.”