Northumberland County Council's financial performance improving amid hopes budget will be balanced

Section 151 officer Jan Willis said the local authority may even deliver a slight underspend despite figures from December forecasting an overspend of more than half a million pounds.

Speaking at a corporate services and economic growth scrutiny committee meeting, she said the local authority’s financial situation was improving every month.

Ms Willis said: “At the end of December we were forecasting an overspend of about half a million, which was an improvement on the previous quarter. We are continuing to review where we are on a month-by-month basis and the position has improved further since December.

“I am quietly confident we are heading towards a balanced out-turn, and potentially a small underspend.”

Ms Willis said the projected overspends were a result of pressures on children’s residential placements and the SEND transport budget, as well as £2 million being paid out to leisure provider Active Northumberland.

The company will be wound up next month when it is replaced as the county’s leisure provider by Places for People, with the money used to “maintain reserves” in order to “facilitate an orderly closure of the business”.

Any funds remaining will transfer back to the council, with Ms Willis saying she was “confident” some of the £2 million would return to the local authority’s coffers.

The forecast overspend of more than half a million pounds came after cash was transferred from the exceptional inflation reserve (£1m) and the business recovery reserve (£2m). Without using reserves, the council would have faced an overspend on services of £3.527 million.

Bedlington West councillor Malcolm Robinson quizzed the finance boss on the council’s use of reserves to meet overspends.

He said: “If that was my personal budget I would think I was living beyond my means. Is this council living beyond its means?”

Ms Willis replied: “No is the short answer. Reoccurring overspends are not being paid using reserves.

“Non-recurrent are being met with reserves, but that is being done on a planned basis. We’re not mortgaging the future – I would not play fast and loose with the council’s financial position.

“I will not allow recurrent pressures to be funded from our reserves.”