Published: Wednesday, 8th October, 2008 12:30
Council faces cash crisis after £1m overspend
By Hamish Hutchinson
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CLACKMANNANSHIRE Council could be hit with a cash crisis as its estimated reserve fund falls to £60,000, below the recommended sum of £1.8 million.
Officials warn that a projected overspend of £1.008m by the council this year will “effectively eliminate the accumulated un-earmarked reserve”.
That means the council will only have £60,000 at its fingertips to deal with any unforeseen financial circumstances over the next six months.
Martin Dunsmore, the council’s accounting and budgeting manager, has said the financial position is serious and that the reserve fund is unlikely to return to a “reasonable” level for another few years.
Councillors in the Scrutiny Committee will discuss the bleak financial forecast today (Thursday).
A report to committee details the current projected expenditure for the council at £111.617m, £1.008m over budget.
The main portion of the overspend is expected to be from Services to People with a total over spend of £1.208m. Within that, Residential Schools, which had a substantial overspend last year, are set to go £395k over budget even though they received an extra £1m funding this year.
Officials claim improvements are expected as the year progresses and currently the Corporate Management Team is actively working to resolve the deficit.
Last year the council faced a similar problem with the reserve fund at one point projected at £9k. That improved due to unspent cash set aside for the social work and education departments leaving the fund at £417k.
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