Fife Council's £10.7m overspend 'significant improvement' in budget forecast

Fife councillors have been told that despite a £10.7m project overspend, the 2024/25 financial position has actually significantly improved in the last few months.

“The current forecast presents an overspend of £10.7m in the current year, a decrease of £3.3m since the last report,” committee papers from Eileen Rowland, the executive director for finance, said.

It’s also a drastic improvement from the £18.6m overspend that was predicted back in September.

The improvement comes down to action taken within council services and directorates to reign in spending over the last several months.

Ms Rowland told Cabinet councillors that the improvement is “anticipated and positive”, but more needs to be done to ensure progress continues.

“The scale of financial pressures on the council linked to the considerable cost pressures and service overspends going forward remain substantial and uncertain,” her report explained.

“Directorates are taking action to reduce the levels of overspends, and reductions in forecasted overspends can be seen across various services.”

However, councillors were warned that a “significant overall overspend” is still expected around health and social care.

“The main area of concern is around health and social care,” Ms Rowland said.

“We’re currently projecting an £11.4m overspend in this area, and members will be well aware of the pressures linked to winter and other issues in the hospitals at this point in time. I’m not confident this position will improve.”

Thanks to the risk-sharing agreement between Fife Council and NHS Fife, the council will only be partly responsible for covering any shortfalls in this area.

However, it’s nonetheless a “significant” risk for both organisations, and it’s been at the centre of discussions since Autumn.

The Cabinet was also warned that Fife Council reserves will be used to cover the current £10.7m shortfall – leaving only £5.6m leftover for future use.

Ms Rowland said this would be “detrimental” to the council’s balances position.

“[It’s] below the policy position of holding balances of 2%, or £22.2m over a three-year period,” the report explained.

Cabinet councillors considered the report on Thursday but did not debate or discuss the financial position in the Chamber.

Council leader David Ross, Labour, said the position would be considered leading up to the new year budget session at the end of February.