Peterborough City Council’s Cabinet has been told the authority is heading for a possible £5.5 million overspend in this year’s budget.
Cllr David Seaton, cabinet member for finance, told Monday’s Cabinet meeting that it was “disappointing to have to report an indication of an overspend of £5.504 million against the budget so early in the year”.
But he added: “We haven’t spent this money, and at this stage it is only a projection that we could potentially have this overspend.”
The overspend, if confirmed, will include £260,000 additional chief executive’s costs which relates to projected savings targets from shared services which have not been met by other authorities.
A further possible £363,000 overspend is projected in additional governance costs – mostly legal services - again relating to shared services with other authorities.
The Cabinet meeting also heard that £822,000 is the potential overspend from additional growth and regeneration costs, mostly made up of parking and highways services costs involving roads and potholes, and street lighting costs linked to changing to more environmentally friendly LED lights.
In addition, £3.687 million has had to be costed into the Peterborough Serco Strategic Partnership. Under a 10 year contract started on November 28, 2011, Serco took on the responsibility for a range of frontline and back-office services for Peterborough City Council, including customer services, business services, HR and payroll, shared transactional services, ICT, procurement and business transformation.
The projected overspend relates to the shared services savings targets from Serco which had been included in the budget, but now show little likelihood of being achieved.
After the meeting, Cllr Seaton said: “The important thing is that we have a plan in place that we can’t 100 per cent stand behind at the current time and say that it is deliverable.
“We need to work through a business-case process and make sure that our plans absolutely can be delivered, and build them back into the budget that will reduce that £5.5 million pounds overspend.
“We should know for sure by the time of the next Cabinet meeting in September. All the details by then will give us a far clearer picture of the figures.
“Myself, our chief executive and our director of finance are working on it at the moment, and we’re looking at a whole range of things such as variable spend to see if we can make other changes that will reduce the expenditure.”
Robert Alexander, Local Democracy Reporting Service