Falkirk Council has uncovered a multi-million pound “bonus” after discovering its expenditure last year was nearly £7m under budget.
Chief finance officer Amanda Templeman told members of Falkirk Council’s executive on Tuesday that while the final accounts have yet to be completed, the net expenditure at March 31, 2022, is forecast to be £387m – £6.7m below the resources available.
It comes as the council agreed when setting its budget in February to use £5m worth of reserves to balance the books. The forecast reserves position, which is expected to be around £7.5m by the end of the year, is now £11.5m.
There was no one single reason for the savings, Ms Templeman said, and all services had reduced their spending as instructed.
While the news was positive, Ms Templeman said she hoped her report was also getting across the “very volatile economic environment we are operating in just now and the significant financial pressures that are facing the council in 2023”.
Rising energy and fuel cost increases don’t just impact on the Council directly, they also have an effect on suppliers and contractors who will seek to pass on the costs, councillors heard.
While the council built in an increase to its energy budgets, initial calculations suggest that this may be around £1.6m lower than required.
The council are also facing calls from trade unions on behalf of staff looking for pay increases who are also under pressure due to the rising cost of living.
Rising interest rates may also have an impact on the affordability of the capital programme.
One factor in the underspend was the teachers’ pay awards being lower than anticipated, saving £900,000, while Children’s Services were under budget by £800,000.
These savings helped off-set the overspends that had arisen because of increased cleaning costs.
Social Work Adult Services also included an underspend, due to delays in appointing staff and lower than expected administrative recharges.
Waste collection also increased its income from dry recyclate due to higher quality card and paper waste in burgundy bins, which exceeded all expectations, councillors heard. Landfill tonnages were also lower than previously projected as were transport costs.
There was also an underspend of £800,000 in the Integrated Joint Board, which oversees health and social care services in Falkirk.
While the home service continues to face significant financial and operational service pressures due to increased demand and ongoing short staffing issues, there were lower staff costs and lower residential care costs, vacancies within the assessment and care planning team and non-recurring savings within respite and day care services.
The service also used £4.7m of a Covid grant to fund expenditure during the financial year.
A one-off rebate of £1.2m from insurance was also noted.
Around £600,000 of the money will be used to fund some of the council’s projects to tackle poverty that were also approved at the executive.
The rest will foot the bill for the increased tender costs of extending Kinnaird Primary School, which will cost £322,000 over the approved budget.