Wolverhampton Council saves £4m to avoid overspend amid Civic Halls row

Wolverhampton Council bosses said "prudent and tight financial management" meant a predicted overspend of £2m for 2019/20 had become a £2 million underspend.

It comes, however, after the Express & Star revealed the Civic Halls project faces further delays and is set to cost an extra £5m. The council has asked the Government to provide the funds.

Councillor Louise Miles, the authority's cabinet member for resources, said the savings had cine from projections included in the budget that did not end up being needed. She said the cash saved would be used to help the coronavirus recovery.

However, Councillor Miles warned the city council faced a dire financial situation, made worse by the pandemic.

She said: “We will publish our outturn report for 2019-2020 this week which shows that prudent and tight financial management resulted in a net underspend of £2 million.

“It is important to stress that this is a one-off and while it is undoubtedly extremely useful, it only equates to less than one per cent of our overall revenue budget and needs to be seen within the context of the ongoing challenges we face.

“As we have previously stated, the council was already forecasting budget deficits of £15.5m in 2021/22, rising to £20.2m by 2022/2 before the coronavirus pandemic. We now think that the ongoing costs of Covid-19 will raise that forecast deficit still further - potentially by around £17 million based on our calculations.

“The underspend is primarily the result of contingencies and projections for certain areas of the budget being made last year which, while reasonable at the time, were not ultimately needed.

“An example of this is money that was set aside as we anticipated more council staff would join the pension fund than ultimately did. We have no control over this, we can encourage staff to join the fund but can do no more than that – so predicting the costs at the start of the year is challenging.

“Due to the ongoing pressures we face, we also held certain senior management roles open during the year to save money.

“Tight control over budgets during the year enables us to transfer unspent sums into specific essential earmarked reserves which is part of our financial strategy to deliver priorities and invest in areas which will deliver future savings and efficiencies.

“Finishing the year with a net underspend of £2 million will enable us to transfer £1.8 million into the Budget Contingency Reserve and £200,000 to a new specific reserve which will be used to support investment in service recovery following the Covid-19 pandemic.

“There are many unknowns, we don’t know what the full impact of the pandemic will be or what future resources central Government will make available to councils.”

Opposition Conservative councillors in the city have called for an official inquiry into the council’s handling of the Civic Halls scheme. The delays mean work is now unlikely to finish on schedule in autumn 2021.