£5m budget overspend raises alarm bells for Dumfries and Galloway Council

Finance chiefs have warned that Dumfries and Galloway Council will spend nearly £5m over its budget this year due to skyrocketing inflation.
And those figures don’t take into account the huge bill the local authority faces to resolve a pay increase dispute with its workforce.
A report due to be tabled at the council’s finance committee next week reads: “It is currently estimated that non-pay inflationary cost pressures will increase the cost of council services by £4.87m in 2022/23, with increased energy costs being the main contributor to this increase.”
Council finance bosses are proposing that the local authority dips into its reserves to continue to fund services. They are also recommending that a report is produced investigating measures that can be taken to reduce the council’s energy and fuel consumption.
In his report for next week’s finance meeting, council corporate accountancy manager Steven Whyte wrote: “The increases in inflation levels in recent months have consistently exceeded economic forecasts and the projected increases in the energy price cap in October, January and April are expected to see inflation push well beyond the current level.
“It is also now expected that very high levels of inflation will be experienced for a more prolonged period than had previously been anticipated.
“This will impact significantly on a range of costs incurred by the Council in both the current financial year and over the subsequent period.”
Here is a breakdown of the £4.87m projected overspend for this year, with last year’s figures in brackets:
gas – £2.699m (£1.03m), electricity – £5.712m (£4.635m), oil – £714,000 (£449,000), energy other – £570,000 (£285,000), fuel council – £2.17m (£1.7m), fuel school transport – £1.374m (£1.23m), fuel public transport – £1.133m (£1.06m), food – £2.465m (£2.3m), schools PPP contract – £15.835m (£15.363m), other contingency costs – £250,000.
The council report states: “It is increasingly apparent that the impact of inflationary pressures is likely to be prolonged and it is therefore appropriate that measures to reduce consumption over both the immediate term and on an ongoing basis are considered.
“This is particularly the case in relation to energy and fuel consumption and measures to reduce consumption, and to accelerate the shift to renewable energy sources could make a significant contribution to both supporting financial sustainability and progressing the council’s commitment to reducing the impacts of climate change.
“It is therefore proposed that a report outlining measures that can be taken to reduce the council’s energy consumption, both for the upcoming winter period and for the longer term, and to accelerate the shift to renewable energy sources is brought to the next meeting of the economy and resources committee.”