Dudley Council chiefs approve new controls to help reduce forecast £10 million overspend
Dudley Council's cabinet chiefs have agreed a raft of spending controls after being told the authority is forecast to overspend by £10 million this financial year.
The expected overspend in the authority's budget for 2023/24 was outlined in a report to the council's cabinet, which met last night.
The additional cost of agency staff, adult and children’s care packages and adverse trading activity have all added to financial pressures.
Cabinet bosses approved a number of radical financial controls yesterday to reduce the deficit in the current financial year and the ongoing impact on future years.
The measures include a recruitment freeze, no new contracts, no additional spending and the termination of fixed-term contacts.
Exemptions may apply in order to maintain essential services and the council’s ability to function.
Outlining the controls, the report said: "They are designed to minimise spending except where an exemption applies.
"The exemptions are designed to maintain essential services and the council’s ability to function.
"Where exemptions do not apply, it is inevitable that there will be an impact on the quality of services.
"It is proposed that the application of exemptions will be reviewed by the improvement delivery board to be set up following the recent corporate peer review."
Potential savings have been identified but the report states: “The resulting forecast indicates a significant risk that the general fund reserve could be exhausted within the next one to two years, if action is not taken.”
It is proposed that the controls are reviewed after each financial year, but remain in place "at least until the council’s unringfenced reserves return to a level of 20 per cent of net revenue spend".
The report said there was currently no requirement for a formal report under Section 114 of the Local Government Finance Act 1988 but there was a risk this would be required in the next one or two years if no action is taken to control expenditure.
Labour's top team have warned the council finances are in "meltdown" and cited the report as evidence the authority's finances are in a perilous position.
However, council leader Councillor Patrick Harley has declared the authority is nowhere near bankruptcy.
Speaking ahead of the meeting, he said: "We will have to make tough decisions, cut our cloth accordingly but we have choices that can be made, unlike Birmingham and the 198 councils which are in a worse position than Birmingham."
