Portsmouth City Council spent £4m less than in budget last year

The fragment from the Union Jack believed to have flown on board HMS Victory at the Battle of Trafalgar. Credit: Sotheby's

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AN UNDERSPEND of more than £4m has been reported for the last financial year by Portsmouth City Council.

Under pressure from central government to slash costs, the local authority managed to spend £4,303,000 less than expected during 2011/12.

This money mostly came from ‘contingency’ funds which the council initially predicted it would have to use, along with savings from the port and council-owned MMD shipping company, as well as various departments.

The cash will now be used to try to reduce the impact of £56m worth of cuts the authority has to make next year because of a reduction in the funding it receives from central government.

Officers have recommended the money be used to fund ‘efficiency savings’ such as studies into how to save money and paying for staff redundancy costs.

Council finance boss Hugh Mason said the money would help to reduce the cuts to front line services the council has to make.

He said: ‘This is good news because what it shows is that the port and MMD are doing very well and meeting the targets we set for them and more.

‘It also shows that officers in the council have been very serious in trying to cut their costs and live within their budgets.

‘I want to recognise sterling efforts in the areas of children’s services and adult social services, where you are not completely in control of how much you spend.

‘If we have got money it will help us to keep council tax down in future.

‘This is a substantial amount of money and it will make a difference – otherwise we would have to get the money to spend on efficiency savings and redundancies from our reserves.’

But Conservative finance spokeswoman Cllr Donna Jones said the underspend was not unusual and the council could do far more to cut costs.

She said: ‘In any organisation the size of Portsmouth City Council it is far from unusual to have surplus revenue at the end of the year.

‘The council has debts that obviously need paying and they have to find £20m worth of savings over the next year without making cuts to services, which I would oppose.

‘There are so many additional savings that they could be making – there are departments that are far too big and schemes which are costing far too much.

‘The council needs to tighten its belt in terms of its use of consultants, head count and a number of other areas.’