South Tyneside Council overspends by £2.5million in 2022/23

Council chiefs have explained issues such as inflation and increased utility costs have led to a more than £2.5million overspend against their planned budget for the last 12 months.

South Tyneside Council bosses have outlined their provisional general fund revenue outturn position for 2022/23, which equated to a £2.715million overspend.

However councillors noted they, and other local authorities, had to battle national economic issues such as rising inflation and high utility costs, the impact of which were not fully known when the budget was set.

Ongoing pressures in terms of demands on children’s and adults social care provision were also highlighted as key contributors.

However council chiefs noted the final position was “significantly favourable” when compared to the projected £5.34million overspend reported in January.

Cllr Joanne Bell, lead member for governance, finance and corporate services, speaking at Wednesday’s (July 12) cabinet meeting, said the council has worked hard to mitigate against the impact of financial pressures.

She said: “The financial prevalence of Covid 19 has continued, albeit to a lesser degree during 2022/23.

“The council has faced significant financial pressures relating to consistently high levels of inflation on utility costs, pay award, and other contractual inflation, as well as significant demand pressures relating to adults and children’s social care and home to school transport.

“Due to improving financial and demand management, sole ownership of budget responsibilities and robust monitoring, the council has been able to manage, mitigate and minimise these pressures as much as possible.”

She added while the council does have reserves to help deal with financial pressures, a “large proportion” of the funds are committed to costs to be incurred in future years.

This leaves “modest sums to combat unanticipated costs”, the cabinet meeting heard.

Cllr Jim Foreman, lead member for housing and community safety, praised the work of officers in helping to drive down the overspend from the previously estimated £5.34million level.

He said: “It just shows the tremendous amount of work that the officers in this authority have done, not only senior officers.

“Every officer that works for this authority is pulling more than their weight.”

The meeting also heard external auditors will again be implementing “rigorous testing and scrutiny” on the council’s accounts, which means there could be slight changes to the provisional figures.