Cornwall Council face £62 million deficit after overspend

By Richard Whitehouse   |   Local Democracy Reporter   |
Thursday 22nd September 2022 11:17 am
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The Deputy Leader of Cornwall Council has admitted that the authority is “in a hole” and facing a deficit of £62million next year. David Harris, who is Cabinet member responsible for finance at New County Hall, made the admission during a full council meeting this afternoon.

Fellow Conservative councillor Connor Donnithorne asked Cllr Harris for an update on the budget planning process when he was given the frank response. The deputy leader said that the council had been impacted by a number of rising costs in recent months.

And councillors were warned that the authority would have to prioritise statutory services when considering its budget plans for next year and may have to reconsider services which it does not have a duty to provide. Cllr Harris also said that the council may have to put some capital projects on hold due to budgetary pressures.

He explained that housing had seen an overspend of £7m and that a rise in inflation has resulted in the cost of wages and contracts of around £15m. Cllr Harris said that the council had allowed £5m in its budget for those extra costs “that we thought would be enough”.

Cllr Harris explained that in the council’s medium term financial plan they forecast that next year the council would have a deficit of £30m. He added: “Officers were working very hard on demand management to bridge this gap and were doing a good job.

“Sitting here today it is looking much like the gap for next year is £62m – we are in a hole. We are going to have to look at with our officers what we can do. Cabinet has been told there is no money.

“We are going to have to start looking at where we have a duty to spend money as opposed to areas where we have the power to spend money. Where we have a duty to spend money we must spend it. Where we have a power we have to look at whether we spend it.

“The other thing we are looking at is whether we can defer some substantial capital items to take the pressure of funding those off the budget. We are in a hole, we are working on it and I will listen to any bright ideas from any councillor in this chamber or outside.”

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