Labour authority justifies huge budget deficit ahead of upcoming election
The Labour-controlled local council has been forced to defend itself against accusations of financial incompetency with an election – in which many of its seats are set to be contested – little over a year away.
A report presented to the Council’s cabinet on Thursday, 19th February outlined projected losses of £8.79m, significantly more than the £7m originally outlined.
Corporate director Christine Salter labelled the deficit “a significant cause for concern”.
The findings come just days after the authority announced plans to cut six hundred jobs in an attempt to reduce its budget by £41m for 2015/16 in an ongoing effort to adjust to the age of austerity.
The Council conceded that it had faced “a major financial challenge” as a result of “significant funding reductions from Welsh Government and increasing pressures on existing Council resources.”
A 2014/15 savings projection had seen the Council predicted to shave £45.4m from its budget this year, but its efforts have only been partially successful and the authority continues to face a significant shortfall ahead of the 2015/16 financal year.
The continued financial pressure on local government budgets has led to concerns that student-based facilities may suffer financial hits, with many of the capital’s library services already having been threatened with full or partial closure.
This prospect appears to have been temporarily averted following a significant public movement to prevent the proposed action.
The existing overspend is largely accounted for by larger than predicted expenditure on health and social care in conjuction with lower than expected tax revenues.
The Liberal Democrats, the second biggest party in the council, condemned Labour’s budgetary record.
“If Labour can’t manage to put forward a credible budget and stick to it without massive overspends, they should really start reconsidering if they’re up to the job of running our city,” Cllr Judith Woodman said.
However, a council spokesman played down the scale of the deficit by pointing out that it was “partially offset by a £4m contingency which was built into the budget to reflect the risk associated with the proposed savings for 2014/15.”
Reacting against criticism, a spokesperson defended council budgets explaining: “We want to make it absolutely clear that the Council is on course to bring in a balanced budget this year and this is reflected in the Report going to Cabinet on Thursday.
“The directorate overspends are partially offset by a £4m contingency which was built into the budget to reflect the risk associated with the proposed savings for 2014/15, which at £48.6m was significantly higher than the level of savings required in previous budgets.
The spokesperson attributed the overspend to funding for Health and Social Care, Children’s Services, Education and Lifelong learning.
Action will now be taken by directorates in order to try to resolve the issues that led to the current position and identify offsetting savings in other areas of the service during the remainder of the year