THE risks to Dorset Council’s budget has been assessed as ‘high’ – with inflationary pressures putting original projections at risk.

The council has already had to find £6.4million extra to meet wage increases which has added at least £1,925 a year to each council officer’s pay. It is also facing above inflation costs for energy, materials and external services.

At the same time the authority is having to trim its capital programme with a wide-ranging review its spending in that area underway. Some of the projects it hoped to undertake have not been possible because of the difficulty in getting materials, contractor inflation and labour shortages, part of the problems attributed to leaving the EU and the Ukraine war.

Councillors were told on Monday that projections for an end of financial year budget pressures have increased from £7.8m to £8.4million with money likely to be taken from reserves to balance the books.

An audit committee was told that if more reserves money is needed to correct the budget that would add to the impact on the council’s risk rating.

The meeting was told that there was some good new with the authority seeing a £3.6 million improvement in debts, although the sundry debt account now stands at £33.1million, more than £9.5million having not repaid for more than a year, the majority of it said to be ‘secured’ and likely to eventually be paid.

At the same time around 17per cent of council tax remains uncollected, with a similar figure for business rates.

Concerns have also been raised over the growing levels of debts the council has because of a complex funding mechanism with the Department of Education over long term schools funding.

The authority has a so-called £42million ‘safety valve’ agreement in place with the department to repay the money, but despite the deal the agreed overspend of £10.4m for Dorset is forecast to have grown to £16.9m.

Part of the reason is down to more Dorset children in independent sector placements than budgeted for; inflation; delays in the Dorset capital budget which has slowed its programme for building more in-county schools places, and the growth in the number of youngsters needing specialist education and/or care.

Weymouth councillor David Gray told the audit committee that he remained “nervous” that the Government would ‘pull the plug’ on the agreement because Dorset Council is not meeting agreed targets which, he warned, could end up costing the council millions of pounds more.

Executive director for corporate development, Aidan Dunn, told him that a meeting had been held with the Department last week over the issues, which had resulted in a request for a recovery programme from the council, as yet without a deadline.

Mr Dunn said he remained hopeful that the situation would be clearer by the summer, especially around delays in construction.

In a report to councillors he said: “There remains a large degree of financial uncertainty and, having reviewed expenditure at the end of the third quarter of the year, Dorset Council’s financial forecast is a £8.4m budget pressure.

“It is vital that the Council remains focused on living within its means, and in particular ensuring that savings and efficiencies continue to be actively sought out and delivered to ensure the 2022/23 budget moves towards financial balance.”