Target for savings is missed by over £13m
CORNWALL Council is set to miss its savings target by more than £13 million and it is almost £400 million in debt, according to a new report.
Last year the council set a target of saving £40.6 million in 2013-14 but current projections show it is likely to deliver savings of £27.4 million.
And its finance officers state that a £10 million contingency fund established last year has already been accounted for.
A large part of the savings shortfall is due to the council's adult social care department failing to meet its targets.
For 2013-14, the department was expected to deliver savings of £18.5 million but, based on figures compiled in December, will only reach £9.7 million.
Further details of the council's budget show the adult social care department is set to overspend this financial year by £11 million, although this impact will be reduced as the council is set to use £5.45 million from its contingency to plug the gap.
Other departments set to miss their savings targets include:
children, schools and families – by £1.6 million – due to delays to a review of its transport service;
environment – by £1.1 million – attributed in part to the delay in passing public toilet costs to town and parish councils;
corporate items – by £1.2 million – due to a shortfall in expected profits at Cormac.
The report – which was set to go before the council's Cabinet yesterday – also details current borrowing.
The council's total debt stands at £801 million – £632 million in long-term loans and £169 million short term. Minus £402 million in investments, its net debt is £399 million.
Councillor Alex Folkes, Cabinet member for finance and resources, said: "Most departments are on course to meet their budgets, or even coming in under budget, but there have been significant pressures on adult care and a transport project which we originally had thought would deliver this year but has been delayed.
"We are aware of the ongoing issue in adult care and will be working hard on it over the course of the next two years.
"Alternative savings have been found to replace these planned savings and the overall position at the moment is a projected overspend at the end of the year of just below £1 million. We are confident there is further action we can take to ensure the budget will balance by the year end.
"The net debt position is pretty standard for an authority of our size. Our treasury management policy, agreed by full council each year and reported back on a regular basis, is to borrow to finance investment and capital projects. With interest rates comparatively low, this makes financial sense."