A council boss has warned people ‘not to have kittens’ after the authority went over budget by almost half a million pounds.
Newcastle Borough Council spent £484,747 more than it had planned between October and December.
Staff sickness at Jubilee2, low car parking income, cover for senior management posts and a drop off in planning application fees all contributed to the overspend.
But cabinet member for finance, Stephen Sweeney said the more interesting point was what the council plans to do about it.
Referring to a council document, he told a cabinet meeting: “Before anybody has kittens, 3.2 says why. What’s more interesting is 3.3 which what we are going to do about it.”
The council’s borrowed cash spending plan, or capital programme, has also overspent by £80,000.
This is in part due to a structural issue at the council’s £15 million headquarters, Castle House, that opened in July 2018 – nine months behind schedule.
However, the authority says it will be reimbursed with £49,000 from builder Kier Group for the works to fix the flooding issue.
The remainder of the capital cash was spent on ‘essential repair works on Knutton Lane bridge’. The authority will not recoup this money.
News of the overspend comes as it looks to plug a £1.2 million gap in its 2020/21 budget.
Council tax in the borough is set to rise by 2.55 per cent – which is lower than last year’s rise. The council also says there will be no redundancies in this year’s budget.
Council leader Simon Tagg backed up Mr Sweeney’s warning not to worry about the overspend. He said: “It’s the same situation we’ve been in for the past couple of years and it has been brought around to achieve that balanced budget – with the help of officers and members.”
Newcastle council’s plan of action to balance the overspend:
3.3 An action plan to address the adverse variance incurred to date has been
devised and will continue to be implemented over the next three months. It is
forecast that the actions identified will reduce the adverse variance to a
balanced year end outturn.
These actions include:
a. Use of additional forecast windfall from the Staffordshire and Stoke-onTrent Business Rates Pilot.
b. Savings from restructures within the Resources and Support Services
c. Appeals relating to the Rateable Value of disused or demolished Council
d. The implementation of an action plan to reduce the Jubilee 2 operating
e. Grants have been received for a number of areas including Brexit and Air
Quality to which significant staff time spent in these areas can be
f. A review of expenditure currently allocated to the Repairs and Renewals
fund is being undertaken to identify items that can be capitalised.
g. It should be noted that the Waste and Recycling service is forecast to
outturn a balanced year end position.
Newcastle Borough Council has had a tough time over the past year, with a number of issues arising with its finances and new headquarters.
Readers may remember the loss of finance boss ‘Dave’, meaning the audit was delayed. The delay cost taxpayers an extra £20,000.
And the issues with ‘mouldy’ function rooms at Castle House have seen weddings moved.
Further problems with the building are said to have caused staff ‘ migraines and headaches’ – an investigation was launched as a result.