Redbridge councillors 'alarmed' by £2 million accounting error

The People Directorate, in charge of adult and children’s social care, has a predicted overspend of £12.122 million for the next financial quarter, £2 million higher than it should be.

Councillors from both main political parties were concerned that mistakes of this size “in several areas” could affect their ability to plan ahead properly.

Cllr Ross Hatfull (Lab, Valentines) said: “Usually I have a lot of sympathy with officers because I understand the pressures you are under and the challenges on ever-decreasing budgets.

“But I look at this and have to admit being quite concerned. We are adding £2 million onto our overspend due to basic accounting errors in the forecast.

“If it was a small amount I would not be that worried but this is a significant amount of money. We use these forecasts to try to reign things in.

“I’m certainly not clear on how these errors have come about. I’m quite alarmed a large mistake was made not just in one area but in several areas.”

What needs to change

Corporate director of people Adrian Loades explained it was possible the system had become “too complex” with “maybe not everybody understanding some of the assumptions”.

He said: “We have gone through and adjustments are being made to make sure we have a very clear understanding of how much we will save by doing things.

“These areas have not created an expenditure, the expenditure was there, just identified late in the day.”

He added that in future it will be ensured that “budget holders have all the information they need to make forecasts”.

Read more: More homeless dying after 'virtually no contact' with health services

The main financial pressure facing Redbridge’s People Directorate is the transport of children with special educational needs, given demand is subject to a “very significant increase”.

Mr Loades added: “We are a low spending authority across people’s services but able to achieve great outcomes for that spend.

“In many ways, that’s great but when funding continues to reduce it means we have less areas to go to (cut down).”

Responding to the error, a Redbridge Council spokesperson said: “The forecasting errors should not have happened, and we should expect that they are as accurate as possible.

"Actions were already underway to improve forecasting, and processes have been reviewed and strengthened to ensure that this does not happen again.”

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