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Tuesday, 22 July 2014

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Council’s shock underspend – in same year services axed

CASH-STRAPPED Copeland Council has reported a “shocking” £1million-plus UNDERSPEND for the year it slashed services and closed facilities.

By Andrew Clarke

The council spent £1.2million less than it budgeted for from April 2013 to March 2014 – during which time it closed Whitehaven Civic Hall and Tourist Information Centre, demolished the town’s only public toilets and reduced grass-cutting and recycling services across the borough.

End-of-year figures reveal that Copeland set aside a revenue budget of £12,352,000 and spent only £11,179,000 of that, prompting questions about whether services could have been saved with the spare cash.

Coun Alistair Norwood, the Conservative group’s finance spokesman, said: “It is shocking that the council worked so hard to trim the budget then had over a million pounds left at the end.

“It should have been monitored every day and the budget tweaked accordingly – and perhaps the devastating cuts to services could have been avoided.

“Budgets are a prediction, so to have three or four per cent difference does happen – but questions have to be asked when the budget was 10 per cent out.”

The council says however that despite having more than anticipated in its coffers, the underspend will not be used to reopen closed venues or reinstate withdrawn services.

Coun Gillian Troughton, portfolio holder for finance, said: “There will always be a difference between planned spending set out in our budget at the start of the year, and actual spend at the end of the year due to unforeseen events.”

Coun Troughton added that the budget is monitored regularly and reported quarterly, with “some of the saving identified throughout the year but a lot not until the end”.

She said: “The underspend was from different budget lines during the year, and none were significant enough to save any of the discretionary services we had to cut. The likes of the Civic Hall and the toilets have an ongoing cost year on year and we have to plan going forward – and have further central government cuts to come – so having money we hadn’t budgeted for doesn’t allow us to revisit them.”

Because the extent of the underspend was not known until after the 2014/15 budget was set in February, £962,000 of it goes into the general fund to offset budgets from 2015 onwards. The remainder goes into the council’s reserves for future spends already earmarked.

The council reported an underspend in every major department; the largest being £541,000 from corporate resources (including finance, HR, legal, member services, property).

Coun Troughton said: “Money was not spent in three broad areas. Firstly, on salaries because we are carrying more vacancies than we anticipated. Secondly, on our buildings where, broadly speaking, less work was necessary during 13/14. Finally, the council has made some efficiency savings, for example through changing our maintenance contractors.”

The level of underspend has been criticised by the Time For Change campaign group. A spokesperson said: “Copeland Council needs to explain why the public are getting short-changed through poor financial planning. To operate a business in this manner and to underspend the public’s money is absurd. People feel their money is being wasted and being dissolved back into the pot.”

Coun Phil Greatorex, a former member of the Executive, said that “some degree of over/underspend is expected, but what concerns me is the level of it. The leader of the council and the Executive need to ask whether they are competent in terms of anticipating changes in the environment in which the council operates and understanding the implications for the budget-setting process.”

Copeland was forced to slash services after having a third of its budget cut by the government. It was the eighth-worst-hit council in the country and said in 2013 that it had to save around £3 million by 2015 – and announced the devastating 2013/14 budget as a result.

It included closing Whitehaven Civic Hall (to save £200,000 per year), closing Whitehaven Tourist Information Centre (£61,000), closing Whitehaven’s public toilets (£18,000), reducing grass cutting (£86,000) and doorstep recycling (£54,000). It also withdrew funding to The Beacon museum which was only saved after Sellafield Ltd stepped in.

Have your say

Obviously either Chris is part of the shambles that is the Exec or he doesn’t understand true business concept about funding. Yes Chris it is good to come in with an under spend based on a certain percentage of your pot, not to come in well below 10% of money that has been allocated and not used. They have trimmed the fat of nearly every public service and centre we have yet they wont do it to the people who are incapable of delivering true value to our towns and people. This council is making it as tough as it can for the new elected mayor to take over with any success so it will be deemed as a failure. yet they are the ones who have put these towns in a sad and sorry state they are in now.

Posted by tj on 8 July 2014 at 12:09

You are dammed if you do and dammed if you don’t. The problem here is the less well educated would have jumped on the story if they spent more or less than the budget. A good business will always try to come in under budget. Well done to the council staff who take so much stick for the salary they get in local government. Hopefully the council can keep the under spend .

Posted by Chris on 7 July 2014 at 17:56

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