Council faces cuts after 'startling' £2m overspend

7 hours ago

Simon DedmanEssex political reporter, Benfleet

News image — Castle Point Borough Council discovered £2m of spending in the summer from the previous year that was not budgeted for

Simon Dedman/BBC A wide picture of castle point council building a two story concrete and brick office building. — Castle Point Borough Council discovered £2m of spending in the summer from the previous year that was not budgeted for

An Essex council has revealed it spent £2m more than it had budgeted for last year, including for staff on its payroll.

The budgetary gap still exists for Castle Point Borough Council - and is forecast to be £4.5m for 2026-27.

Angela Hutchings, the authority's chief executive, told the BBC the shortfall was "startling" and due to reporting errors, and said an investigation had been launched.

Castle Point has used reserves - its savings - to cover most of the overspend, but now faces making significant savings, although Hutchings says it is "too early to say" how services will be affected.

The forecast overspend represents an additional 28% on top of the council's total net budget for services this year of £16m.

If no action is taken in two years,the interim chief finance officer warns in council papers that the authority would need government intervention in the form of "exceptional financial support".

Many of the costs discovered in June were deemed "foreseeable" in the council papers, such as £900,000 of planning legal costs and £400,000 on waste and recycling.

About £1.3m was for staff salaries, creating a "high level of risk" without "corrective action", the report said.

Hutchings told the BBC "it is a base budget issue", meaning the same problems discovered at the end of the last financial year had been carried over into this year and beyond.

Just eight months ago, Castle Point council documents described the budgetary estimates as "robust".

Simon Dedman/BBC A woman with shoulder length hair wearing a neck scarf looking at the camera with a neutral expression. An office atrium is out of focus behind her. — Angela Hutchings said Castle Point's budget shortfall was "startling"

Hutchings told councillors there were "things that were inherently wrong with the council's operation which needed to be fixed" since she became chief executive four years ago.

"Statutory services, which must be provided by law, were in fact not being provided at all," she said, including public health, community safety and emergency planning.

'No equal pay policy'

She told the BBC that Castle Point was the last council in England to introduce a policy for equal pay between men and women in 2023.

"There was no policy to ensure equal pay between men and women," she said.

"So the way in which we have approached it was in terms of complete organisational redesign."

Hutchings said for a local authority to be in that position in the 2020s was "just not acceptable".

But after building up capacity within the council, this month's papers signalled £500,000 of savings would need to be made this year - and £4.5m next year.

"The budget process will inevitably require a review of the way in which the council is staffed," Hutchings told councillors.

"I've absolutely no desire to return to the way things were, where there were not enough people to do basic functions."

Further details on the council's budget and the state of its finances will be published in December.

Castle Point has been run by independent groups since 2022 - the Canvey Island Independent Party and People's Independent Party.

The council leader has not responded to requests to comment.

The former Conservative leader of Castle Point, Andrew Sheldon, described it as "the work of staggering incompetence".

"This budget variance is worth six times the entire local parks and open spaces budget for the year, or double the entire waste and recycling budget," Sheldon said.