FINANCE chiefs at Herefordshire Council have warned that difficult times are ahead as they reported an almost £16m overspend for the first three months of the current financial year.

Revenue budget forecasts show the council will have £15.92m more in the first quarter than it had anticipated.

Some £11m of this relates directly to the impact the pandemic has had on the council’s expenditure and income, according to a report presented at yesterday's (September 24) cabinet meeting.

But the Ministry of Housing, Communities and Local Goverment has allocated Covid-19 grants to cover this, so council officers have forecast a net overspend of £4m.

Chief finance officer Andrew Lovegrove said: “The future is going to be very tough for the economy and Herefordshire will be not treated any differently.

“The budget that the Government had planned has been postponed again so it is quite difficult to look forward to the future with an element of council finances.

“We were due to have a spending review but it’s not clear whether that too has been cancelled or delayed.

“We can only plan with the information we have to hand.

“Times are going to be tough for the economy and Herefordshire businesses, residents and the council will find it tough as well.”

Mr Lovegrove said the council had sufficient reserves to ensure they can carry on providing services but that it finds itself in a complex and moving position.

“This is a forecast based on the end of June figures, so we are now a little bit further down the road of this year and government grants are coming in on a fairly regular basis.”

He also said the creation of the next council’s budget will be challenging.

“There will be additional challenges due to the Covid response and the legacies going forward.”

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True Independents group leader Bob Matthews said the council should be taking stringent steps owing to the fact that extremely difficult times that are expected over the next few years.

Liberal Democrat group leader councillor Terry James said: “This is one quarter of what is unfortunately going to be many quarters of hard times ahead.

“There’s a hard, hard road ahead.”

Council leader David Hitchiner agreed.

“We need to be battening down the hatches as a nation as well.”

Conservative group leader Jonathan Lester said these were unprecedented times and understood why there was an overspend and called for caution when exploring new initiatives.

“We still don’t know the full impact of the situation on the council’s financial position.

“Times are going to be really tough and we must all be focused on economic recovery.

“Now is not the time to be investigating ideas or going into greater expense which we just cannot afford.”

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