WORK to reduce a forecast overspend of £1.5 million by Sheffield Council for the current financial year has resulted in the authority now being expected to underspend during 2010/11 by £600,000.
The improved financial position is revealed in a report to the authority’s cabinet, which meets on Wednesday.
But the council is still implementing cuts of £219m over three years from April, so further savings are to come.
Allan Rainford, a senior officer within the council’s finance department who put together the document, explained forecast overspends of £1.6m in Children and Young People’s Services and £600,000 in the Development, Environment and Leisure departments have been halved to £800,000 and £300,000.
In Children and Young People’s services, the change was due to a review of grant-funded expenditure and, in Development, Environment and Leisure, due to factors including “better than expected performance in relation to the waste contract” with Veolia, Mr Rainford said.
The council’s resources department is showing the biggest overspend, of £1m during 2010/11 - an increase of £200,000 on the forecast position a month ago. Mr Rainford said it was a temporary spike because of the cost of moving departments from old, leased buildings to council-owned ones, which will save money in the long term. The overspends are more than balanced by underspends of £1.8m in the Communities department, which funds neighbourhood services, £475,000 in the Corporate department and £464,000 in the Deputy Chief Executive’s department.
Mr Rainford said officers believe it is likely the Highways department, part of Development, Environment and Leisure, will overspend due to high winter maintenance costs, but that the bill will be covered by a £2m reserve so will be excluded from the council’s overall figures.
Another area of overspending excluded from the figures is £1.9m with contractor Capita, which handles administration and housing benefits. It will mostly be covered with £1.8 million compensation being received from the company for not achieving performance targets.
An underspend of £700,000 on predicted housing benefits in 2009/10 is being carried over to cover if this year’s demand exceeds the budget.
The council’s legal services department is set to run £61,000 over budget but Mr Rainford said this is due to a large fall in property search income due to the recession.
Another area of concern is that while the council’s housing revenue account has a £201,000 surplus, it could be almost doubled if the council was able to bring in £191,000 from letting the 35 per cent of its garages which are standing empty.