Mansfield Council to ‘carefully monitor’ cost of energy after £442k shortfall last year

The council’s 2022/23 financial report says budgets for fuel and utility costs were based on estimates through information available between autumn 2021 and January 2022.

However, the end-of-year report shows budgets were short by £294,000 for gas and electricity and £148,000 for fuel due to soaring costs in the last 18 months.

The financial situation will be discussed at the next meeting of the council’s overview and scrutiny corporate resources committee.

In a report, Chloe Edlin, council group accountant, said: “Since the 2022/23 budget was set, the UK has seen marked increases in the cost of key expenditure items such as fuel and utilities.

“This will mean increased costs for the council and increased costs for our residents.

“Estimates for both fuel and utilities were included in the 2022/23 budget using information available at the time.

“However, increases in both of these items have been much greater than anticipated.

“We are anticipating further pressures on these budgets throughout 2023/24 that will need to be carefully monitored and managed.”

The soaring energy costs came alongside record levels of inflation during the previous financial year and a higher-than-expected pay award for all staff members.

Each employee was given a £1,925 pay rise last year, working out at 6.79 per cent on average – costing £1.1m.

The authority is also facing staffing pressures due to recruitment “difficulties”, with a number of posts currently vacant.

Ms Edlin said: “There are a number of vacant posts throughout the authority.

“However, in order to ensure key services continue as expected, some roles have been covered through agency staff, which is more expensive than employing staff directly.

The council generates a high proportion of its income from commercial/industrial rents and Ms Edlin warned the council would need to “monitor this income stream closely”, with businesses experiencing the same financial pressures such as increased energy and staffing costs.

The papers also reveal the wider general fund budget ended with a £143,000 surplus in March, which has been transferred to reserves to fund future council projects, while unspent capital funds of £13.1m from 2022/23, including £6.3m for general services and £6.8m for housing, have been carried over into 2023/24.