Shropshire Council spends £1 million less than budgeted

A year-end revenue underspend of £1 million has improved from a third quarter projection £779,000, with the saving being put down to £680,000 coming from increased revenue from the Battlefield Incinerator in Shrewsbury.

The council also made a saving of £1 million from its corporate budgets although the saving was offset by increased costs for the environmental maintenance department.

The department was the source of "significant additional expenditure" of £740,000 on vehicle maintenance, reactive safety works, settlement of commercial claims, and other areas.

A report from Shropshire Council's finance officer James Walton said that because the savings are not part of the council's base budget they will not count towards bridging the organisation's funding gap in coming years.

He said: "The council’s revenue position for 2016/17 has improved by £0.779m when compared to projections made at Quarter 3 resulting in a net underspend of £1.023m, a variance of 0.18 per cent on the gross budget.

"This improvement has been delivered as a result of variances across a number of council services although the majority of these are not within the base budget and therefore will not be available to reduce the funding gap in future years."

The council's funding gap – the difference between the amount it receives and the amount it has to spend – is set to widen to £76 million by 2019/20 according to official auditors.

In their annual report on the authority's finances, which was published earlier this year, they cast doubt on the authority's ability to maintain its services without action.

The Grant Thornton report stated: “The council requires savings to close a funding gap of £76.5 million by 2019/20. This is in addition to a significant savings program.

"Achieving the required efficiencies will be extremely challenging. In the short to medium term, the council is proposing to close its forecast budget gap of £40 million to 2018/19 by fully utilising the earmarked reserves.

"There is a significant risk that the council’s financial position will impact on service delivery, both statutory and non-statutory in future years.”

Mr Walton's report contained other positive news for the authority with confirmation that money to pay for a multi-million IT system upgrade had been set aside.

It also revealed that funds for other projects designed to make the council money in the long term have been confirmed or increased for 2017/18.