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Cornwall Council set to miss savings target and almost £400m in debt

By RWhitehouse  |  Posted: January 29, 2014

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CORNWALL Council is set to miss its savings target by more than £13million and is also almost £400m in debt.

The figures have been revealed in a report due to go before the council’s Cabinet this morning.

Last year the council set itself a target of saving £40.6m in 2013/14 but current projections show that it is only likely to deliver savings of £27.4m.

Added to which the council’s finance officers state that a £10m contingency fund established last year has already been accounted for.

A large part of the shortfall in savings is due to the council’s adult social care department failing to meet its own targets.

For 2013/14 the department was expected to deliver savings of £18.5m but, based on figures compiled in December, is expected to only reach £9.7m.

Further details of the council’s budget also show that the adult social care department is set to overspend this financial year by £11m. However the impact of this will be reduced with the council set to use £5.45m from its contingency to plug the gap.

Other departments which are set to miss their savings targets include children , schools and families which has missed by £1.6m due to delays to a review of its transport service.

The environment department has missed its target by £1.1m which is attributed in part to the delay in passing public toilets to town and parish councils.

And the corporate items department is set to come in £1.2m below its target due to a shortfall in expected profits at Cormac.

The report – which was set to go before the council’s Cabinet yesterday – also details the council’s current borrowing.

In total the council’s current debt stands at £801m which consists of £632m in long term loans and £169m short term.

However the council also currently has £402m in investments so its net debt is currently £399m.

Alex Folkes, Cornwall Council Cabinet member for finance and resources, said: “Most departments are on course to meet their budgets or even coming in under budget, but there have been significant pressures on adult care and a transport project which we originally had thought would deliver this year but has been delayed. We are aware of the on-going issue in adult care and will be working hard on it over the course of the next two years.

“Alternative savings have been found to replace these planned savings and the overall position at the moment is a projected overspend at the end of the year of just below £1m. We are confident that there is further action that we can take to ensure that the budget will balance by the year end.

“The net debt position is pretty standard for an authority of our size. Our treasury management policy, agreed by full council each year and reported back to them on a regular basis, is to borrow to finance investment and capital projects. With interest rates comparatively low, this makes financial sense.”

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4 comments

  • JeremyBadger  |  January 29 2014, 9:59PM

    And that man Lavery said that he could find the odd £10m for a stadium last year!

    Rate   9
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  • DipStick  |  January 29 2014, 6:44PM

    Two of the most important rules for any local council should be a) to live within its means and b) by all means possible to reduce the burden on the tax payer. Doubt we'd have CEOs on a gazillion pounds a year then! DS

    Rate   8
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  • TWINSCREW  |  January 29 2014, 1:54PM

    "The net debt position is pretty standard for an authority of our size. Our treasury management policy, agreed by full council each year and reported back to them on a regular basis, is to borrow to finance investment and capital projects. With interest rates comparatively low, this makes financial sense." What a blase' comment to make from a person entrusted with finance and resources, any businessman/woman will tell you this is not a good position to be in, especially when the only income is what is taken from rate/tax payers. Interest rates will not always be low and when they rise this amount of debt will be almost impossible to make good, when a business is in this position the only way out is to cut costs until you are solvent once again, how they achieve this will be the mark of sound management.

    Rate   5
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  • albru  |  January 29 2014, 12:14PM

    Well at least we can fall back on al savings and efficiencies promised by the advocates of a single unitary council. Oh wait a minute, what happened to them?

    Rate   11
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