Northumberland County Council forecasting £5.2million overspend due to covid

Northumberland County Council is forecasting only a modest budget deficit this year, despite an ‘extraordinary year’ dominated by coronavirus.
County Hall, Morpeth. Picture by Jane ColtmanCounty Hall, Morpeth. Picture by Jane Coltman
County Hall, Morpeth. Picture by Jane Coltman

A financial performance update, based on the mid-year position at the end of September, was presented to the authority’s cabinet on Tuesday, December 8, and saw the council’s finance team report a projected overspend of £5.2million come the end of the 2020/21 financial year.

However, this does not include further funding expected from the Government to help with ongoing Covid-19 pressures, totalling £3.2million, which would bring the shortfall down to £2million.

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The breakdown of the figures shows that the pandemic has led to £33.2million of additional spending, but there is a predicted underspend on business-as-usual areas of £8.1million.

This is then further offset by the £21.8million of Government funding received so far, as well as the £2.05million handed over for lost income in terms of sales, charges and fees. The report notes that a claim of £1.6million has been made for April to July and the full year’s figure is estimated to be £2.05million.

In terms of capital spending, the picture has improved from the position in July when an overall underspend of £67.8million was being forecast across the 2020-21 programme, including £73.7million of spending being ‘re-profiled’ from the current year into next, albeit offset by £6.4million in the other direction).

As at the end of September, the predicted underspend had reduced to £31million – £30.3million re-profiling (£36million from 2020-21 into 2021-22 and £5.7million the other way) and £700,000 underspend.

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In the first six months of the year, £58million was spent, including £15.5million on transport projects and £22million on school buildings, including the construction of new schools at Morpeth and Ponteland.

The council’s capital receipts (selling property and land, etc) have taken a hit though, against an original estimate of £4.7million income.

The report says the in-year position ‘is currently difficult to assess’, but adds that the ‘maximum estimated to be achieved during this financial year is £1.25million’.

This is because ‘Covid-19 has had a major effect on the confidence of occupiers and investors to commit to property deals nationally and locally’.

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