The £1m underspend comes despite pressures on housing and homelessness and ongoing management waste services in the city.
Coventry City Council is set to announce a final revenue underspend of £1m in its end of year financial position for 2018/19.
The Revenue and Capital Outturn Report for the end of year 2018/19 explains the Council’s financial management over the previous 12 months.
Although the underspend has been welcomed, senior councillors have already turned their attention to forecasts for 2020 which indicate a potential £17m funding gap.
Cabinet Member for Strategic Finance and Resources, Cllr John Mutton, said that each year it is becoming more and more difficult to meet financial targets.
He said: “We had a £3m overspend across housing and homelessness, in large part from the cost of Housing Benefit payments for people and families who require housing in emergency accommodation. This is going to continue to be a financial pressure, but we need to do everything we can to get people out of bed and breakfast accommodation.
“As a Council we have to look across all our services to make savings – although our first priority is towards frontline services and our duties towards our most vulnerable residents.”
Overspends of £2.7m within Waste and Fleet Services are also reported.
Councillor Mutton was keen to point out the difficult financial circumstances that local councils like Coventry are facing. He added: “The Government has continued to reduce the resources that are available to us and has cut our resources by over a half since 2010. The recent report by the Institute for Fiscal Studies has shown how much local government spending has fallen by and that cuts have been larger in more deprived areas like Coventry.”
The IFS report indicated that resources are unlikely to keep pace with rising demands and costs for public services in the future. Councillor Mutton added: “Despite this, we have worked very hard to take decisions to help strengthen our financial position and make the best use of the money that is available to us. Our outturn position includes some one-off resources of around £8m that result from plans that we have put in place within our overall financial strategy.
“These include additional dividends from our company shareholdings; a surplus generated by the Coventry and Warwickshire Business Rates Pool and additional income from the Council’s investments.”
The report outlines how these resources are being set aside including £4m to fund future commercial developments and money set aside to strengthen the Council’s financial resilience, an issue that a number of other councils have received recent warnings about.
In 2018/19 the Council has seen an increase in the level of Council revenue reserves from £62m to £71m.
The finance report also explains the capital programme spending of £147m which is the largest programme achieved for many years. Projects include the city’s Battery Industrialisation Centre, near completion of the city’s new destination leisure facility, infrastructure works within the Whitley South scheme and purchase of the Council’s share in the Friargate Joint Venture.
Cllr Mutton said: “Achieving a balanced budget in 2018/19, achieving a massive capital programme and strengthening our financial position at this time is an indication of the effort that goes into managing services for a city with a population of 360,000. Every decision we take begins with the question of affordability and financial sustainability.”
Cllr Mutton added: “I’ve been delighted that we have been able to manage our accounts in this way. It has been much more difficult to achieve this in the face of the pressure on our services, the Government’s austerity policy, and the uncertainty of Brexit. We will continue to face reductions in government funding and will need to absorb the financial costs of a growing city.
“I’ve been a councillor for 35 years and I’ve never witnessed the level of challenges we now face.”