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£1m overspend in Herefordshire Council's budget
CORPORATE and customer services (CCS), the directorate at the centre of Herefordshire Council’s IT contract scandal, went more than £1 million over budget last year.
CCS wasn’t alone, with the council’s overall directorate overspend coming in at £900,000 for 2007/2008.
But by offsetting the total of transactions not under directorate control, the council actually achieved a net underspend of £591,000 over the past year – on the budget of £122 million for day-to-day services.
Final figures for the council’s 2007/2008 financial fortunes show tighter cash management and the use of contingency funds paid off in bringing down an overspend initially estimated at around £2 million but eventually pitched at £578,000.
All told, the directorates went a net £900,000 over budget – with CCS and its £1,176,000 the worst offender.
But the financial performance of the directorates is offset against the near £1.5 million in additional income the authority found through various sources, resulting in a final net underspending of £591,000.
The report showed the council had met its financial challenges for the 2007/2008 budgetCouncillor Harry Bramer
Much of the pressure on directorate spending was eased by the council putting more than £1 million of contingency cash into adult and community services, which was originally on course for an overspend of around £4 million on a budget of £46.9 million.
The overspend chalked up by CCS actually went up from an initial estimate of £940,000 on a £7.4 million budget.
CCS oversees the council’s specialist Information Communications and Technology (ICTCS) division that was heavily criticised late last year by an independent report into the awarding of two key IT contracts together worth millions of pounds. Big changes to the way ICTCS operates have been brought in since, resulting in savings.
Funding plans for an upgrade of the council’s community network software system suggested an annual cost of £1.6 million, coming down to £1.1 million with contributions from the schools budget.
However, the council is challenging elements of the contract to cut costs even further, with the overall position offset by a reduction of £185,000 to directorates for line rental and call charges and another £160,000 for schools.
Computer spending also cost the council’s legal and democratic services section – which comes under CCS – an overspend of £160,000, much of the money going on new machines and training for councillors after the May 2007 election.
These costs are expected to balance out over the next three years, but operating costs in Members’ Services continue to rise in support of an increasing number of meetings.
Planning and highways made the biggest contributions to a £60,000 overspend in the environment directorate.
Fee incomes for both building and development control fell short of budget targets, with the latter also seeing a big overspend (£216,000) on IT and legal costs.
Car parking fell £95,000 short of its income target and overspent its budget by £63,000. Underspending was achieved by the resources directorate (£585,000) and in corporate budgets (£118,000). Good management of benefit systems was recognised by the government with an improved grant.
Budget pressures on the council are unlikely to ease over the rest of the new financial year, but money management so far sees a general reserve of nearly £7 million available for future unforeseen requirements according to the report.
Councillor Harry Bramer, cabinet member for resources, said that the report showed the council had met its financial challenges for 2007/2008, particularly in providing for the most vulnerable.