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Wednesday 18 August 2010

Action Plan Implemented to Balance Books


Service managers throughout Cheshire East Council are being asked to identify further savings.

Action is being taken across the council to correct the mounting budget pressures currently standing at a projected overspend of £13.6m by the end of the financial year.

The majority of this – £12.2m – is contained within adult social care and children’s services.

The possible overspend – which will only be realised if the Council takes no action – is offset by a £1.6m contingency fund for the effects of inflation.

Action plans are already being developed to address the remaining balance and the updated position will be reported in September.

At a meeting of the Cabinet yesterday (Monday), the Council’s financial position, outlined in the first quarterly performance report of 2010/11, was considered.

Members agreed to instruct service managers to determine corrective action to balance this year’s budget as a matter of urgency.

The situation has been exacerbated by the Coalition Government cutbacks announced in June. This represents £2.5m in revenue cuts for Cheshire East Council.

Adult care costs have risen, resulting in a projected overspend of £5.8m. This has been caused by a surge in the number of people turning to local authority care due to personal financial pressures. There has also been constant growth in the ageing population, which is well above average in Cheshire East.

In the children and families area, there is a £5.7m forecast overspend by the council. This is due mainly to the increased demand for care placement, safeguarding arrangements and a £1m overspend in school transport costs.

The overspend in our highways, planning and technical services is forecast to be £1.2m over budget. However, this will be overtaken and brought into line within budget before the year end.

Council Leader Wesley Fitzgerald said: “At this early point in the financial year, indicative overspends are normal due to billing and seasonal expenditures.

“The degree of overspend apparent this year is demanding early action to ensure that we recapture the situation of a balanced budget by year end next April.

“A projected overspend is obviously not desirable but is understandable given current government cuts and increased demand within children’s services and adult social care.

“It must be understood that it only becomes an actual overspend if remedial action is not taken.

“Some of the reductions required may be challenging and could mean spending reductions in other areas.

“I would reassure our residents that any proposed reductions will undergo careful consideration before any final decisions are taken.”

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