Council to set aside £1m pot for legal disputes
Northumberland County Council is to set aside £1million of its 2018-19 budget underspend to fund legal fees ‘in a number of ongoing disputes’.
A report to next Friday’s (May 24) meeting of the cabinet on the authority’s provisional financial out-turn for the past financial year reveals an underspend on its revenue budget of £11.2million.
At the full council meeting at the start of the month, councillors already agreed to put £3.5million of the in-year underspend into a reserve to fund the feasibility costs of the next stage of the business case for the rail line linking south-east Northumberland to Newcastle.
The report to councillors also explains that Active Northumberland is to receive an additional one-off contribution from the underspend of £300,000, while an increase to the equal pay provision of £1.8million is requested, mainly to cover HMRC liabilities.
It is also proposed to create a reserve of £1million ‘to fund the legal fees required to secure the council’s interests in a number of ongoing disputes’.
And this is not the only time that the issue of legal fees rears its head in the report.
The breakdown of the underspend shows all but two departments of the council ended up under budget in 2018-19, with one of those going over budget being children’s services, as was expected and reported throughout the year.
The service overspent by £2.6million in the end, despite an additional £3million in the budget, over and above the £2.5million added in the previous financial year.
Further growth of £1.2million has been approved for 2019-20 ‘as the existing pressures look set to continue’ and the overspend has been attributed largely to the ‘the continuing cost pressures around external residential placements, special guardianship orders and the use of supported accommodation for care leavers’.
The only other department with an overspend was human resources, although this had dropped from a predicted £450,000 in December to £120,000 by the end of the year – ‘largely due to external legal fees now being funded corporately’.
In terms of capital spending, ie, on new buildings and infrastructure, the council spent a total of £135.6million in 2018-19, £66.8million less than the original budget of £202.5million approved by the council in February last year.
The £135million represents of the 86.3 per cent of the revised budget, meaning an underspend of £21.5million.
Given progress being faster or slower than expected on various projects, some of the funding for capital projects is to be ‘reprofiled’, or moved from one financial year to another – a net total of £18.3million.
This is made up of £7.9million, which had to be brought forward from 2019-20 to be spent last year, set against £26.2million, which has been deferred from 2018-19 into the current financial year.
This is in addition to the £81million of reprofiling which had already been agreed in February as part of the council’s medium-term financial plan 2019-22, which followed the phasing of schemes being reviewed.
The council’s level of reserves, as at March 31, was £238.5million.
Ben O'Connell, Local Democracy Reporting Service