HEREFORDSHIRE Council has only around £100k available in general reserves.
The council’s cash reserves are now so limited that any top ups to breaking point budgets will need to be recovered next year.
An additional £2m included in the 2013/14 budget to increase reserves has had to be set aside for unbudgeted costs, including pending court cases.
The council has already been warned that it cannot keep dipping into reserves to ease its overall financial position. As previously revealed by the Hereford Times, the council has to find a further £33m in savings over the next three years on top of cuts already coming.
On paper, the council holds reserves of more than £18m. But £5.5m relates to schools balances and cannot be used, £4.5m is its minimum balance that it must not plan to use to balance its budget, and £8.5m is earmarked against specific commitments – leaving only around £100k available for use.
Another £3m has to be found to fund “change management” over the current financial year, with much of that sum covering one-off severance costs.
On Thursday, cabinet will hear that cuts have slashed the council’s projected 2013/14 overspend by around £600,000 since August.
A cabinet report calls the latest overspend projection of £3.3m an “improvement”. With cuts forced to go far further, directors and financial resources are focussed on identifying savings for the remainder of 2013/14 and future savings for 2014/15 to 2016/17.
Adults Wellbeing remains the biggest budget pressure with savings slipping or not able to be delivered, even though the related overspend has been cut from £4.3m in August to £3.4m.
The position in Children’s Wellbeing has worsened by £131,000 since August, with additional pressures of £0.51m, mitigated by savings of £0.38m.
Included in the 2013/14 budget is a target of £300,000 to be saved through procurement projects like printing, stationery, cash collection and mail services.
But, while savings of £150,000 are anticipated, the remaining £150,000 will not be delivered with the pressure passing on to central budgets.
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