Falkirk Council: Underspend puts almost £7m back in reserves

Chief finance officer Amanda Templeman told members of Falkirk Council’s executive on Tuesday that while the final accounts have yet to be completed, the net expenditure at March 31, 2022 is forecast to be £387 million – £6.7 million below the resources available.

That is good news for the council as it had agreed when setting its budget in February to use £5 million worth of reserves to balance the books. The forecast reserves position – expected to be around £7.5 million by the end of the year – is now £11.5 million.

There was no one single reason for the savings, Ms Templeman said, and all services have reduced their spending as instructed.

While the news was positive, Ms Templeman said she hoped her report was also getting across the “very volatile economic environment we are operating in just now and the significant financial pressures that are facing the council in 2023”.

Rising energy and fuel cost increases don’t just impact on the Council directly, they also have an effect on suppliers and contractors who will seek to pass on the costs, councillors heard.

And while the council built in an increase to its energy budgets, initial calculations suggest that this may be around £1.6 million lower than required.

The council is also facing calls from trade unions on behalf of staff looking for pay increases who are also under pressure due to the rising cost of living. And interest rates rising may well have an impact on the affordability of the capital programme.

One factor in the underspend was the teachers’ pay awards being lower than anticipated, saving £900,000, while Children’s Services were under budget by £800,000.

These savings helped off-set the overspends that had arisen because of increased cleaning costs.

Social Work Adult Services also includes an underspend, due to delays in appointing staff and lower than expected administrative recharges.

Waste collection also increased its income from dry recyclate due to higher quality card/paper waste in burgundy bins, which exceeded all expectations, councillors heard. Landfill tonnages were also lower than previously projected as were transport costs.

There was also an underspend of £800,000 in the Integrated Joint Board, which oversees health and social care services in Falkirk.

While the home service continues to face significant financial and operational service pressures due to increased demand and ongoing short staffing issues, there were lower staff costs and lower residential care costs, vacancies within the assessment and care planning team and non-recurring savings within respite and day care services.

The service also used £4.7 million of Covid grant to fund expenditure during the financial year.

There was also good news in the shape of a one-off rebate of £1.2 million from insurance. Some of that money – around £600,000 – will be used to fund some of the council’s projects to tackle poverty that were also approved at the executive.

The rest will foot the bill for the increased tender costs of extending Kinnaird Primary School, which will cost £322,000 over the approved budget.