Aberdeenshire Council is set to underspend in 2011/12 by £4.8 million, it has been revealed in a report prepared for councillors by officials.
The extent of the underspend will be revealed by the Council’s Head of Finance, Alan Wood, in a report to the Council’s Policy and Resources Committee this week.
It follows an underspend for the previous financial year in the Council’s unaudited accounts of £10.6 million, and is forecast to come in addition to the £52 million of savings which the authority claims to be on track to deliver over 2011/12 and 2012/13.
According to Mr Wood’s report, the major contributing factors to the underspend come from permanent teachers (£920,000), internal transport (£648,000) and capital financing charges (£2.3m). However, some areas of council operations were subject to overspends, including home care for older people (£500,000) and residential care for older people (£520,000). In addition, there continues to be significant pressure on the building repairs and maintenance budget. Councillors will discuss Mr Wood’s recommendation that the sum be diverted from the council’s revenue budgets into its capital budget, which has been placed under pressure by spending cuts at Westminster and Holyrood.
As the council’s building programme gathers pace, the capital plan will come under increasing pressure. In addition, as part of its spending review, the Scottish Government indicated that it wishes to re-profile capital grant funding to councils which could lead to temporary cuts to capital funding of around £5m in 2012/13 and also in 2013/14.
Services across Aberdeenshire Council are continuing to deliver budget savings as part of an on-going programme to become more efficient in the way it operates.
Officials say that the pressure to keep identifying and delivering savings is being maintained across all services as forecasts for the next 3 to 5 years show an increasingly difficult and challenging financial position for the council.
All services have been asked to keep up the efforts to make savings in order to reduce the burden on frontline services in the next few years.
If councillors accept the recommendation to divert the underspend into the capital budget, the monies will likely go towards infrastructure spending on a programme of new schools, care homes and leisure facilities.