Current financial position discussed at full council meeting
East Lothian Council’s financial position at the end of August 2021 was discussed at today’s (Tuesday 16 November) full Council meeting.
Elected Members were advised and noted an update on the financial position relative to approved budgets, and the potential risks and financial challenges going forward. The impact of COVID-19 and the Council’s response continues to have a significant impact on overall financial plans, to support the ongoing response and aid recovery. The councillors were advised that ‘the Council continues to operate in a very challenging and complex landscape with a wide range of financial uncertainties with additional cost and demand pressures, which are likely to last beyond 2021-22.’
At the end of August 2021, the Council is reporting a £252,000 overspend (0.5%) in the General Service revenue financial position however the position varies across departments.
The Education and Children’s Directorate is reporting an overspend at the end of August 2021 of £401,000 (0.8%) an increase of £185,000 on the Quarter 1 reported position with Education reporting an underspend of £39,000 (0.1%) and Children’s Services an overspend of £440,000 (6.2%).
Children’s Services is currently projected to overspend by around £1 million in 2021-22 which is mainly due to continuing demand for Residential, Secure and External Fostering placements. This position includes an estimated full-year impact of COVID-19 related costs of £643,000 for the service.
Depute Council Leader, Norman Hampshire, said: “This updated financial position reflects considerable work carried out by Council Officers to manage budgets during a time of unprecedented financial challenges. Whilst the Scottish Government has provided additional funding to support the COVID-19 pandemic recovery the overall expected cost pressure from COVID-19 in 2021-22 for East Lothian Council is expected to be around £12 million.”
“The Council is currently having to manage an increasingly uncertain and complicated financial landscape. Previously, council officers set out future financial prospects for the Council over a 5-year plan based on a range of scenarios. This provided clear indications to help with budget planning and reflected current and future service demands. The past 18 months has required a range of immediate and urgent responses of key Council services which of course has impacted considerably on our financial planning.
“Local authorities continue to face considerable economic uncertainties which, balanced against a backdrop of increasing demand for services, means it is inevitable the Council will need to introduce greater efficiencies and innovative ways of working to ensure the continuation of our essential services. This will include working with our public and private sector partners to protect services whilst managing our shared resources.”
“It is clear from this report that East Lothian Council has reacted and coped well with many of the challenges and protected essential services for our local residents and communities. However, the continued financial impact around COVID-19 and associated uncertainties mean that it is still unclear what the future implications will be on public spending.”