COVENTRY City Council is predicting it will have an overspend of more than £9million after its first budget report of this financial year.
The document – to be discussed at the next cabinet meeting on Tuesday, August 30 – details how the council will spend its cash and attributes the shortfall to ‘inflation and rising energy prices’.
A proposed pay award to council employees has impacted, along with energy costs doubling, challenges in managing budgets for looking after vulnerable children in the city due to growing demand and the costs of the Coventry bin lorry driver strike which lasted more than six months and cost more than £4million.
The authority claimed it needed to provide a service to residents while protecting the council from even more financially devastating equal pay claims that, it said, could have cost up to £30million.
The financial forecast includes £8million additional inflationary costs, a £4million overspend in Children’s Services due to increased numbers and higher costs of placements.
Although there are some predicted underspends in other budgets, the report shows the overall expenditure forecast is £246.9million compared with a budget of £237.4million for 2022/23.
At the same time the council is predicting spending more than £165million on major capital projects, including school expansion schemes and buildings within the Friargate scheme.
The report sets out the approach being taken to build a new home for children with disabilities as part of its overall strategy for looking after vulnerable children – the vast majority of this capital funding is secured from external sources meaning it cannot be used to balance the books.
The Cabinet report sets out steps the council will take to move towards a balanced budget with managers being told to identify areas where they can manage expenditure levels.
Coun Richard Brown, Cabinet member responsible for finance, said: “No-one should be in any doubt that this is the most serious financial position we have faced for some time, and we should anticipate some massive challenges over the next couple of years when we set future budgets.
“We are dealing with a very difficult set of circumstances currently and face a real challenge to balance our budget this year.”
