The Chief Financial Officer, Joe McLachlan provided an update on the latest financial position at a meeting of Cabinet on Wednesday 15 January 2025.
In August 2024, the CFO highlighted that financial forecasting of spend through to March 2025 revealed that there could be a possible £20m overspend across all service budgets as they responded to rising inflation and increasing costs and demand for services. A corporate Recovery Plan was put in place to mitigate the threat, and additional measures were introduced to enhance the well-established financial management that the Council has in place.
As a result of the significant work that has taken place across the Council since August, the financial position has steadily improved throughout the year and there are now signs of further improvement as the end of the financial year approaches, meaning that the threat of the substantial overspend that was shown in August will not now materialise.
A series of financial interventions were introduced in August with line by line scrutiny of service budgets taking place as well as a review of balances which supplemented the work from the cross cutting reviews that have been undertaken to streamline budgets and remove operational duplication. All these measures have collectively contributed to a more settled financial position for the Council.
It should be noted that service budgets remain under significant strain as costs remain high and demand for services continues to grow. These pressures will continue throughout the year and extend into future years meaning that the Council budgets, especially the health and social care budget will continue to experience overspends.
In recognising the work undertaken throughout the year, Cabinet this week approved proposals to allocate £6.5m to support service budgets and bring them back into balance.
At the same meeting Members agreed to add a further £2m to the Council’s Innovation Fund to support efforts to reduce future costs and demand with £0.393m of this funding used to support the expansion of enablement services within health and social care with a further £0.453m allocated for a new assisted living model at Clinchyard Place in Galston which will provide temporary tenancies as ‘step-down’ accommodation options - supporting individuals to develop independent living skills. These two proposals will result in longer terms savings for Health and Social Care of around £0.688m per annum.
At the Cabinet meeting, Council Leader, Councillor Douglas Reid welcomed this update and commended the actions of officers and senior managers.
“Like households and other parts of the public sector, we faced tremendous financial pressures as costs and demand grew exponentially but our services rallied round and worked tirelessly to find creative and innovative solutions to help bring our finances back into line.
“This has not been easy but change was paramount to our ability to deliver priority services in the future.
“Our Recovery Plan has paid off – it provided a clear framework for financial scrutiny and security across the Council, and I’m reassured to learn that these measures will remain in place for the foreseeable future as we head shortly into a new financial year."
