Increasing energy costs and higher than expected pay awards mean East Riding Council is set to overspend by £2.4m.
East Riding of Yorkshire Council is set to overspend by £2.4m this year and that's after using £7m of it's reserves.
Director of Finance - Julian Neilson - says increases in energy prices have played a part in the overspend.
A higher than expected pay award has cost the authority £8.9m and the increases in energy costs are now expected to cost an extra million pounds.
A report presented to the councils Cabinet highlighted the impact of some of the increases including the national pay awards.
"on 25 July 2022, the national Local Government Employers agreed to make a final offer to the trade unions for the settlement of the 2022-23 pay claim consisting of an increase of £1,925 to all local government pay points, which has now been agreed. The projected cost of this offer for 2022-23, based on people in post, is £14.2m. This represents a projected overspend of £8.9m against the budgeted pay award of 2.5% for all pay points."
Other areas of the council's budget have also seen overspends, but there are some areas where underspends are also predicted.
- The council's Adult Social Care and Health budget is forecast to underspend by £1.5m (1.3%)
- The Communities and Environment budget is forecast to underspend by a net £1.7m (3.6%)
- The Children, Families and Schools budget (excluding Schools Budget) is forecast to overspend by £1.9m (3.6%)
- The Planning and Economic Regeneration budget is forecast to overspend by a net £2.8m (6.7%)
As well as using £7m of it's reserves the council has also budgeted for £5m of savings from service budgets this year and says it expects 99% of those savings to be delivered. Without using the reserve funding the actual overspend would have been £9.4m
Council Leader - Jonathan Owen - says it's been a turbulent year.
The schools budget is currently forecast to outturn with an overspend of £12.7m including £4.4m in the High Needs block, £6.1m by Primary Schools, £1.6m by Secondary Schools and £0.3m from Early Years. The council says this is primarily due to the latest projections for increases to energy bills and the latest national pay offers for teaching and non-teaching staff being significantly higher than budgeted for.
It is expected that some of that overspend in schools will be covered by increases in central governemnt funding but the report presented to the council's cabinet stated:
"The Autumn Budget confirmed that the core budget for schools will be increased by £2.3bn in 2023-24 and a further £2.3bn in 2024-25. However, at the time of writing, there has been no additional funding announced to address the inflationary pressures in the current year, whilst the funding increase announced for 2023-24 is less than current inflation rates. The impact will not be fully understood until further details are released on funding allocations to individual councils."
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