Lancashire County Council’s forecast budget deficit has fallen by £9m - but the authority still faces a funding gap of £135m by 2022.
The first quarter of the financial year resulted in an estimated overspend of £2.7m across the year as a whole. But based on performance in recent years, the initial extra spending is expected to be clawed back in the coming months.
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Interim Chief Executive, Angie Ridgwell, told a cabinet meeting that departmental directors had been reminded to “live within their means and not exceed the budget envelope given by council”.
No measures have been put in place to control spending in individual service areas, but departments can expect “close scrutiny”, Ms. Ridgwell added.
A report presented to cabinet detailed a mixed picture of budgets being hit and missed across the range of services provided by county hall.
Staff vacancies accounted for almost three quarters of the £4.5m forecast underspend in the children and families, adult disability, learning disability and mental health teams. Recruitment is ongoing, but an expected vacancy rate of 2 percent has been exceeded.
That helped offset a failure to achieve savings expected to be generated by staff taking unpaid leave and a planned reduction in agency costs.
Members heard that adult social care continued to face financial pressure because of high demand. The service is expected to overshoot its budget by £4.2m this year.
Even in areas where demand has fallen slightly, like children’s services, “some complexities in current cases” are having an effect on budgets, Ms. Ridgwell told members.
The cabinet report also revealed the impact that even slight fluctuations in the volume of work can have on costs. A 1 percent increase in the number of forecast placements for children, for instance, would result in a £2.7m increase in spending.
Councillors were told that 93 percent of the savings so far identified to help bridge the budget gap were on target to be delivered, although some may be delayed. The remainder were described as “challenging to deliver currently”.
Reserves have received a boost from a recent recalculation of the money the council has to set aside to cover the cost of capital projects - but they will still run dry by the middle of 2020.
Further savings proposals are expected to be put before members later in the year.
After the meeting, council leader Geoff Driver said: ""Like all councils we are facing significant financial pressures, and we are continuing to work hard to ensure we can achieve a financially sustainable position.
"Our priority remains providing the best service possible to the people of Lancashire, particularly our older residents and children in need of our support and protection, but we do need to cut our cloth appropriately.
"We have been in a fortunate position that we have had a very healthy reserve pot of money to draw upon in recent years. However we cannot continue to rely on our reserves, which while still healthy, are dwindling.
"Our aim is to achieve a balanced budget by 2020/21 and a great deal of work is taking place to identify savings across the board.
"There is also careful monitoring of day to day spending to help ensure our savings programme remains on track."