Falkirk Council financial concerns highlighted in first meeting of 2022

On Monday, January 10 the council’s appointed auditors Ernst and Young will be presenting their annual audit report for the year 2020/2021.

Ernst and Young are required to communicate matters relating to the audit of the financial statements to those charged with governance of the organisation and the appropriate body to consider governance within Falkirk Council is the audit committee.

The committee will hear the challenges facing the council in terms of financial stability in 2022/23 as its budget gap increases to around £25 million and the need to identify further savings becomes more urgent.

Ernst and Young highlighted concerns about being able to deliver savings within Children’s Services.

The report states: “The council faces an acute financial challenge in 2022/23 – despite the application of fiscal flexibilities to help relieve COVID-19-related financial

pressures.

"The projected budget gap in 2022/23 is £24.6 million, and remains subject to risk factors. Council of the Future savings are projected to bridge £7 million of the gap in 2022/23.

"However, the council faces the urgent need to identify further service savings of around £9 million in the 2022/23 revenue budget. We note the council will consider an updated Medium Term Financial Plan in March 2022.

"This process is critical to support the priorities and decisions of the new council that will be formed in May 2022."

As the local elections loom, the effectiveness of the council's financial management has come into question.

The report states: “The council continues to demonstrate good financial control overall of the in-year budget, with the exception of demand led pressures in children and family social services.

“We have concluded the council’s current capital planning arrangements do not support robust forecasting and monitoring. Overall, our work has highlighted concerns about the status and capacity of the finance function within the council.”

The report also states Falkirk Council has done well in terms of providing value for money through its services – although more needs to be done.

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