Thames Ward councillor David Stevens, who was Conservative finance spokesman when the Conservative-Lib Dem coalition formed the 2010/2011 administration, has analysed the latest budget monitoring report for Reading Borough Council, which said £3m of the £18.9m savings, needed by the end of the financial year to balance the books, are at medium to high risk of not being achieved.
The monitoring report states that to achieve the budget savings of £18.9 M have to be found. Of this amount, £15.9M is categorised as ‘green’ i.e the officers assess that the savings are very likely to be achieved. The remaining £3M comprises £2.5M categorized as ‘amber’ savings i.e. there is medium risk that the savings will not be achieved and £0.5M categorized as ‘red’ risk i.e. there is a high probability that the savings will not be achieved.
There is only about 6 months left to implement savings. The new Labour administration’s decisions to defer or abandon a number of planned increases to fees and charges is incomprehensible. In addition, some of the spending pressures are exceeding projections and so additional unplanned compensatory savings have to be found. It is therefore increasingly likely that much of the ‘amber’ and most of the ‘red’ savings will not be achieved. This will mean that that the authority is likely to overspend its budget by £1-2 M.
Cllr Stevens said: "Officers now only have about six months to implement the savings. Their job has not been made easier by the new Labour administration's decisions to defer or abandon a number of planned increases to fees and charges."
He pointed to Labour's decision to suspend a hike in adult day centre prices, which would have generated £230,000, and to scrap the planned charges for green waste collection. This was projected to generate about £180,000 income. It was decided that compensating savings would be achieved by reducing the headcount in various parts of the culture budget. We are not yet certain which jobs will be lost. The job cuts will incur redundancy costs which will reduce the in-year savings.
Cllr Stevens also warned a further threat comes from spending pressures exceeding predictions, including £1m from a 9% rise in the number of children referred to social services, with £300,000 overspending predicted in adult social care.
In very few areas have Labour sought to find compensating savings. These are heavily reliant on overachieving the projected income from bus lane enforcement. Currently officers project that an additional £0.5M will be collected in fines from Reading's motorists.
The collection rate significantly exceeds that for 09/10 and 10/11. This may continue for the rest of the year but it makes an astonishing assumption that motorists are happy to continue to incur fines!
More probably motorists will correct their behaviour to avoid the fines. There is some evidence of this already happening; in July 11,413 penalty notices were issued. This dropped to 8,473 in August. If fewer fines are imposed this additional source of income will diminish meaning savings must be found elsewhere.
The report itself showed that Reading borough is £276,000 over its budget, which council leader Cllr Jo Lovelock, described as "encouraging" but opposition Councillors believe is "alarming".