Assurances sought over impact of Wrexham Council’s £23.8m budget deficit

Assurances have been sought about Wrexham Council’s budget forecasting and monitoring in light of its projected £23.8m deficit.

Earlier this month the council’s leadership revealed the stark situation it is facing just two months into the financial year with an overspend of £23m predicted with immediate action being taken to reduce this.

At the authority’s governance and audit committee questions were asked about forecasting and budget monitoring as it is looking to make swingeing cuts just months after setting the budget.

Lay member Trevor Coxon asked about the jump in projected deficit and asked whether the £23.8m was an accurate one going forward.

The council’s chief finance officer Richard Weigh explained that a number of early assumptions had changed related to pay inflation, and social care demand.

He added that in the second part of the year social care and environment department costs increased, with inflation contributing too.

Mr Coxon applauded officers for realising the position this early in the financial year giving the council more time to make the necessary savings.

The committee’s vice-chair, Ruabon Cllr Dana Davies sought assurances that robust forecasting and budget monitoring were in place going forward, especially in the social care and environment departments.

Mr Weigh assured the committee lessons had been learned.

“I said at executive board there were lessons for us to learn around the nature of some of the forecasts”, he said.

“What we also need to say is that we were forecasting pressures in those areas where the earlier forecasts changed at the outturn. There were a number of reasons for that.

“As soon as that was clear in the information we analysed as the accounts were coming to closure, when everything settles towards the end of March, early April, then we immediately put additional provision in place around the controls in those two areas (social care and environment) – additional financial support.

“We meet fortnightly with the services and the accountants themselves to ensure that there is a lot more rigour around those projections and forecasts.

“It is important to say we did forecast pressure in those areas throughout the year, but it would be disingenuous to say they didn’t increase, and our final forecast was greater than the Quarter 3 forecast we had reported to the executive board.”

Mr Weigh added: “We did go into some detail around the nature of that particularly in terms of growth in social care over the winter which exceeded the levels that were forecast.

“We’re talking late December when we had to make a call on that and certainly around some of the additional demand in adult services that hadn’t really started to become apparent in the data we used to make the forecast.

“We made some assumptions it wouldn’t go up in the winter but what actually happened was the demand was greater than the forecast.

“The other element in social care was assumptions particularly around placements and very costly placements ending or being replaced by a different provision that were assumed but didn’t materialise by the end of the financial year.

“Environment (department) pressure, the most significant element of that was around school transport, and again whilst we made some assumptions in the autumn around the number of new contracts and packages – that assumption didn’t fully reflect the almost 43 per cent increase in total cost of that provision of the first six months of the year to the second six months.

“There ought to have been a clearer narrative explaining the risks around that even if you didn’t have a precise figure in one of the earlier reports and that’s one of the areas in terms of our forecasting and reporting that is much clearer now.”

Interim reports are now being provided to councillors between executive board meetings.

Cllr Davies said there was a great deal of interest amongst constituents in the projected £23.8m deficit and suggested as much information was made open to the public as possible.

She said councillors are receiving a lot of questions from residents but cannot share the answers because they are confidential.

Mr Weigh answered that because the updates contain savings proposals as part of the recovery plan the next report has to remain confidential, but the following report to executive board will not be.

By Rory Sheehan – BBC Local Democracy Reporter