Hartlepool Borough Council bosses may be forced to look to reserves to combat overspend this year

A Hartlepool Borough Council’s finance and policy committee report states the council is currently facing a predicted £920,000 overspend in its general fund revenue budget for this financial year.

Council chiefs say they have identified £371,000 savings for 2018/19 in corporate expenditure to combat the overspend, inducing a reduction in holiday pay costs and funding changes.

However they warned while they will continue to look for further budget savings for this year, it may not be achievable, in which case they would have to review reserves to find the remaining £549,000.

Council finance staff warned this is at a time when the council is facing a 2019/20 budget deficit of nearly £6m and ‘significant uncertainty’ in relation to funding levels for 2020/21 and 2021/22.

A report from Chris Little, director of finance and policy, said ‘extremely difficult decisions’ will be required over the next three years to balance the budget.

It said: “These issues are a significant financial challenge for the council and will require robust action and difficult decisions to address.

“Officers have identified measures that will reduce the forecast deficit to £549,000 and will continue to try to achieve further in-year reductions.

“However, there is a risk that further in year budget savings may not be achievable.

“Therefore it may be necessary to identify one-off funding from reviewing the council’s earmarked reserves and details will be reported to a future meeting.

“The financial pressures facing the council are not unique and national press reports over the last few weeks have highlighted significant financial issues in many councils, including Northamptonshire County Council, East Sussex County Council and Birmingham.

“This clearly indicates the financial pressures facing the sector and individual councils will need to develop local strategies to address their specific financial challenges.”

It will mark the third successive year the council has overspent at the end of the year which has been attributed to increasing pressures in relation to children in need of care.

The council had previously predicted an overspend of £800,000 for this year, but this increased due to more money being needed for regeneration and neighbourhood services budgets.

This was partly down to an increase in pupils numbers accessing special educational needs transport.

The report noted Hartlepool is in a better position than some areas after implementing ‘difficult decisions’ over the last few years to cut expenditure, increase council tax and achieving housing growth.

A discussion on the funds will be held at the council finance and policy committee on Monday, November 26, at 10am at the Civic Centre.

Nic Marko , Local Democracy Reporting Service