Barking and Dagenham Council is still forecasting a "significant" £13.6million budget gap despite reducing its predicted overspend.

Cabinet members were updated on the authority's general fund budget position for 2022/23 at a meeting last night (November 15).

The council is now predicting this spend will be around £196.6m at the end of the financial year - its target is about £183m.

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The gap has reduced from the £16m overspend forecast in September.

According to a council report, the fall has come mainly from Community Solutions, which brought together some front-line services, cutting its in-year overspend by £2.4m as well as using an investment reserve to cover lost income from dividends.

The document said: "This is a significant overspend in the period and is driven by significant cost pressures such as the potential local government pay award and the increasing costs of social care."

The council has also implemented a London Living Wage increase this month.

But Cllr Dominic Twomey, deputy leader and lead member for finance, said that, despite the forecast, the council is not "overspending" in his view.

He told cabinet members: "We're not overspending, we're spending what's required in my opinion. 

"We have made efficiencies and savings and I'm sure there are some areas where we can always find a little bit more.

"But we're spending, as far as I'm concerned, what is required. We're spending public money in an effective and efficient way to support the people in this borough and we're just not getting enough income from government."

The authority is facing increasing financial pressures from the impact of inflation such as with pay and the cost-of-living crisis, according to the report.

Some extra pressures have also come from the Covid pandemic.

"As time has passed, some of the additional costs have now become the 'new normal' and it is becoming increasingly hard to draw a sharp distinction between Covid costs and business as usual," it said.

The report added that the current predicted overspend can be covered fully by reserves but this "would reduce the council’s ability to absorb further financial risks or support new investment in transformation in future years".

The authority is now targeting £6.2m of savings in this financial year.

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