Redbridge Council has managed to close the gap in last year’s “challenging” budget despite an overspend of £10.2 million on day-to-day services.
This week, deputy leader Kam Rai announced the council’s final position for its general fund is now an underspend of £1.6m.
This is due to the council moving £11.8m from its corporate budget in order to plug this considerable gap.
Luckily the corporate budget, reserved for unexpected risks or growth in demand on services, underspent last year “largely due to the pandemic”, said Cllr Rai.
He told the overview scrutiny committee: “I know I probably say this every year but it has been a challenging year, even more so than previous ones.
“A lot of funding from the government has been reduced but the pressures the council faced did continue”.
In December last year, a review of the council’s medium term finances forced it to find ways to cut £17m from its spending.
The final budget report for 2020-21 shows the council managed to save £12m during the year, with the remaining £5.4m “rolled through” into this financial year.
Cllr Rai added that while that while it is “disappointing” that more money couldn’t be saved as planned, the overall the budget showed a “positive financial outcome”.
However, he warned the council faces continued challenges: “We are planning for inflation for this year and in the coming year, which is nowhere near to what we were thinking about when setting the budget [in February].”
In a positive turn, the council’s emergency reserves, which were forecast to drop by £17m when the budget was set, were “topped up” to £83m by the time the financial year ended in March this year.
At the time, operational finance director Ian Ambrose warned that using the reserves was “unsustainable” and should only be a one-off.
Corporate director of resources Maria Cristofi said: “A lot hard work went into tracking the financial outturn and looking at mitigation plans at each meeting and I’m pleased to say we’ve landed where we have at the end.”