£3.5m Deficit Forecast
The Mid-Year finance report debated at today’s Corporate Scrutiny Committee shows that Cheshire East Council are forecasting a £3.5m deficit compared to budget for 2013/14. This is much better than in previous years, when much larger budget deficits were forecast, but it is still bad news.
For several years the Council has set unrealistic budgets, leading to large overspends during each year. There has then been a panic demand for managers to take remedial action, in turn resulting in emergency cost-cutting to try and finish the year on budget. These unplanned cuts usually cost the Council dearly in the long run and do not represent value for money.
Despite the fact that steps have been taken to ensure tighter budget management, in the current year the rush to make unbudgeted cuts during the year has led to the axing of garden refuse collections a month earlier than planned. Many households have already had their last garden refuse collection of the year – before the leaves have fallen from the trees.
Other information contained in the mid-year financial report includes:
Ø There is a £300,000 shortfall in car parking income, blamed on a 8% reduction in town centre footfall
Ø Cared for Children in Cheshire East are below the national average on educational attainment
Ø £4.2m has been provided for actuarial charges relating to Voluntary Redundancies. Please note that Voluntary Redundancies are costing the council far more than originally planned.
Ø Planned changes to the management restructure are behind schedule, so the savings in 2013/14 are expected to be £2.3m rather than the £3.5m budgeted.
Ø The New Homes Bonus (a government bribe to councils to allow new housing) is forecast to bring in £3.75m to the Council this year (£870k + £1844k + £1037k)
Ø The £1m approved to be spent on a Bio-Incubation Unit at Alderley has been cancelled (as Astra Zeneca have pulled out)
Ø In the period July – September 2013, 34 Council employees were made voluntarily redundant at a cost of £722,955 (an average of £21,263 per person)
Cllr Sam Corcoran said, “The list of failings in this report shows that familiar problems at Cheshire East Council have not been solved. The repeated, complacent Conservative response that ‘all is now well’ is wearing very thin. Yet again the report shows that car parking income is below budget, redundancy costs are high and projects are behind schedule – the over-hyped management restructure is well behind schedule and £1.2m off budget. This restructure has already caused significant disruption and concern to staff.”
Labour Group Leader David Newton said, “A £3.5m deficit compared to budget is being forecast for 2013/14. This is much better than at a similar point in previous years, but still bad news. I am concerned by the complacent message being put out by the Conservatives. Cheshire East Council has received a qualified audit report for the last 2 years over Value for Money and the problems at the council are not yet solved.