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Saturday, April 20, 2024

Financial Strain: Barking and Dagenham Council’s £12.6m Budget Overspend

Dominic Twomey, who is deputy council leader and cabinet member for finance, growth and core services, said the council’s Housing Revenue Account (HRA) is also reporting a predicted overspend of more than £7m.

An East London council has predicted it will go over its budget by more than £12million and has warned it’s experiencing financial challenges “never seen before”.

During a cabinet meeting on Tuesday (November 14), Barking and Dagenham Council revealed a bleak outlook for its 2023/24 budget with a forecast overspend of £12.6m during the end of September, also known as Period 6.

Dominic Twomey, who is deputy council leader and cabinet member for finance, growth and core services, said the council’s Housing Revenue Account (HRA) is also reporting a predicted overspend of more than £7m.

Cllr Twomey explained that even if the council tried to borrow money from its general fund which is worth £17m, it would only be able to use £5m because of a council policy which dictates it must always have a balance of at least £12m.

He said: “Our current financial trajectory puts us on course to draw down funds from our general fund balance which currently stands at £17m.

“This is [worsened] by the fact that our current policy for our general fund reserves requires the general fund to maintain a level of £12m. So as you can see, we would only have £5m to use from that particular reserve if needed.”

Cllr Twomey went on to say that the council had been hit hard by financial pressures in adult social care, temporary accommodation and upcoming changes to its sports and leisure provider.

He said it had been difficult for the council to make savings because of the Conservative Government and said the council is experiencing financial setbacks “never seen before”.

Cllr Twomey said: “Like many local authorities, the council is facing significant financial challenges never seen before from Covid to the cost of living crisis.

“But I go back to it and more importantly, this Tory government has led an austerity drive that has left local government facing a £3billion black hole or funding gap over the next two years.”

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