Lancashire County Council has said “strong financial management” saw it reduce a forecast £17.7m overspend to a “very small” one at the end of the 2022/23 financial year.
The authority made the projection of the larger overspend at the end of Q1 last year.
But in a report detailing the council’s final 2022/23 revenue and capital outturn position published this week, an overspend of just £0.75million was stated.
The council said the result was achieved “through prudent management and a strong focus on finances”, with the final reported figure representing less than 0.1% of the authority’s approved budget of £948.107m.
Service pressures were mitigated through a number of “one-offs” such as grant funding and non-recurrent income settlements as well as delivery of previously agreed savings, the authority said. The one-off transactions cannot however “be relied upon in future financial years”, according to the report.
In adult services, there was a £7.5m underspend due to additional income from health contributions in the form of one-off incomes. But in children’s social care there was still a £13.7m overspend due to higher than budgeted placement costs and extra cost of agency staff.
There was also a £5m overspend in public and integrated transport due to higher school transport costs, the authority said.
An underspend of £7.4m in treasury management, though, was principally driven by the sale of gilts and bonds, Lancashire reported.
Alan Vincent, deputy leader of the council, said: “It is very pleasing that we are now £17m better off than we thought we were going to be this time last year.
“This is very much down to our hardworking staff who are dedicated to delivering the best services possible at the best value for money.
“Nationally we know these are challenging times for all local authorities, and while the council’s reserve position remains healthy, there are significant levels of uncertainty in relation to future years funding and expenditure levels.”
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Vincent said that key expenditure pressures remain across the authority’s children’s and adult social care provisions. Even though growth has been built into these budgets, these areas are “still a high risk to future years’ budgets”, he noted.
“There are also additional uncertainties regarding the financial impact of inflation, the current cost-of-living pressures on energy costs, fuel and foodstuffs and the ongoing negotiations on the local government pay award for 2023/24 and beyond,” Vincent added.
“All of these areas will remain under detailed review and we will focus all our efforts on balancing the books to keep services running both efficiently and effectively, whilst keeping spending under control in these difficult financial times.”
Reflecting on the future financial health of the council, the report stated: “Over the period of the medium-term financial strategy there is a structural funding gap that will need to be addressed. Currently there are sufficient reserves to support the forecast gap through to 2026/27 and beyond but the intention is that further savings will be identified to reduce the requirement from reserves in 2024/25 and beyond.
“The forecast funding gap is predicated on the achievement of all agreed savings, and any undelivered or delayed savings will further increase the gap. In 2023/24 services will need to deliver c£75m of previously agreed savings to stay within their budget envelope which includes those delayed from previous years. These savings are a combination of efficiencies, demand management, income generation and a reduction in some services.
“Whist there is an ongoing financial risk, the support available from reserves provides time for future savings proposals to be carefully developed and considered along with the scope for investing in areas which could deliver longer-term financial benefits.”
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