Pembrokeshire Council report £2.9m underspend however future budgets will require ‘large-scale savings’

Cash-strapped Pembrokeshire council ended up with an underspend of nearly £3m, senior councillors heard. ‌​‌​‌​​​‍‌​‌​​‌‌‌‍‌​‌‌​​‌​‍‌​‌‌‌​‌‌‍‌​‌‌‌‌​​

At the July meeting of Pembrokeshire County Council’s Cabinet, members considered a county council budget outturn monitoring report for 2022-23. ‌​‌​‌​​​‍‌​‌​​‌‌‌‍‌​‌‌​​‌​‍‌​‌‌‌​‌‌‍‌​‌‌‌‌​​

In part of the report, Director of Resources Jon Haswell stated: “Projecting the outturn position throughout 2022-23 has been extremely difficult. ‌​‌​‌​​​‍‌​‌​​‌‌‌‍‌​‌‌​​‌​‍‌​‌‌‌​‌‌‍‌​‌‌‌‌​​

“The council’s financial position continued to improve throughout the year, with a projected overspend of £2.2m in November 2022 improving to a projected underspend of £1.3m in January 2023, to the final outturn position of a £2.9m underspend, after accounting for contributions to and from reserves. ‌​‌​‌​​​‍‌​‌​​‌‌‌‍‌​‌‌​​‌​‍‌​‌‌‌​‌‌‍‌​‌‌‌‌​​

“The improved outturn position is primarily attributable to the continued high level of vacancies offsetting additional pay and price inflation costs, and the slippage in the Capital Programme resulting in a delayed borrowing costs. ‌​‌​‌​​​‍‌​‌​​‌‌‌‍‌​‌‌​​‌​‍‌​‌‌‌​‌‌‍‌​‌‌‌‌​​

“The £2.9m underspend will be appropriated to the Initiative Fund reserve to provide resources for the council to invest in improvement projects and to realise future cost avoidance / budget saving opportunities.” ‌​‌​‌​​​‍‌​‌​​‌‌‌‍‌​‌‌​​‌​‍‌​‌‌‌​‌‌‍‌​‌‌‌‌​​

He added: “Whilst increasing reserves is always positive, we must remember that the funding gap in the Medium-Term Financial Plan 2023-24 to 2026-27 is likely to increase due to the current levels of inflation not reducing as quickly as predicted, and the ongoing cost-of-living crisis. ‌​‌​‌​​​‍‌​‌​​‌‌‌‍‌​‌‌​​‌​‍‌​‌‌‌​‌‌‍‌​‌‌‌‌​​

“We need to continue to address these financial challenges to ensure the council maintains a sustainable financial position over the medium and longer term. ‌​‌​‌​​​‍‌​‌​​‌‌‌‍‌​‌‌​​‌​‍‌​‌‌‌​‌‌‍‌​‌‌‌‌​​

“This will inevitably result in some extremely difficult decisions having to be made, by officers and members, and the positive outturn position should not be used to mask the financial challenges ahead.” ‌​‌​‌​​​‍‌​‌​​‌‌‌‍‌​‌‌​​‌​‍‌​‌‌‌​‌‌‍‌​‌‌‌‌​​

Speaking at the meeting, Cabinet Member for Corporate Finance Cllr Alec Cormack said: “One per cent under budget in turbulent times is a very positive result.”
However, he raised the issue of the many staff vacancies. ‌​‌​‌​​​‍‌​‌​​‌‌‌‍‌​‌‌​​‌​‍‌​‌‌‌​‌‌‍‌​‌‌‌‌​​

“This continues to place increased and sustained pressure that cannot continue in the long term,” he said. ‌​‌​‌​​​‍‌​‌​​‌‌‌‍‌​‌‌​​‌​‍‌​‌‌‌​‌‌‍‌​‌‌‌‌​​

Members heard quarter one figures were expected to come to the September meeting of the Cabinet. ‌​‌​‌​​​‍‌​‌​​‌‌‌‍‌​‌‌​​‌​‍‌​‌‌‌​‌‌‍‌​‌‌‌‌​​

“The early indications are that budget pressures have increased rather than decreased.” ‌​‌​‌​​​‍‌​‌​​‌‌‌‍‌​‌‌​​‌​‍‌​‌‌‌​‌‌‍‌​‌‌‌‌​​

He said a provisional 3.1 per cent funding from Welsh Government may be “optimistic” set against a backdrop of unchanged central government spending. ‌​‌​‌​​​‍‌​‌​​‌‌‌‍‌​‌‌​​‌​‍‌​‌‌‌​‌‌‍‌​‌‌‌‌​​

He told members that, even with a 7.5 per cent council tax rise, there would be a need for large-scale savings.
“Reserves may form part of the answer, but reserves are only a one-off sticking plaster,” he warned, adding the council was “likely to face unpalatable decisions next year.” ‌​‌​‌​​​‍‌​‌​​‌‌‌‍‌​‌‌​​‌​‍‌​‌‌‌​‌‌‍‌​‌‌‌‌​​

Cabinet members approved the report and the appropriation of £2.826m to the Initiative Fund reserve to provide resources for the council to invest in improvement projects and to realise future cost avoidance / budget saving opportunities. ‌​‌​‌​​​‍‌​‌​​‌‌‌‍‌​‌‌​​‌​‍‌​‌‌‌​‌‌‍‌​‌‌‌‌​​

By BBC LDRS ‌​‌​‌​​​‍‌​‌​​‌‌‌‍‌​‌‌​​‌​‍‌​‌‌‌​‌‌‍‌​‌‌‌‌​​