Auditors have said Somerset CC is “failing to meet savings targets” despite a revised approach.
A report by South West Audit Partnership (SWAP) also questioned the way Somerset sets and monitors potential savings targets.
LGC reported last month how Somerset was warned in a Local Government Association corporate peer review that it had only sufficient resources to balance its budget for one more year beyond 2018-19 if overspending continued and did not get a “grip” on expenditure. Somerset’s mediumn term financial strategy said in January the council faced a £13m funding gap in 2018-19.
The SWAP report to the county’s audit committee on Thursday said a new commissioning-led approach to achieving savings was introduced in 2017-18.
“Forecasts indicate that this revised approach is failing to meet savings targets set. Although the difficulty in achieving savings is recognised this audit has reported issues that will affect the ability of the council to maximise savings delivered,” the report said.
“Saving targets put forward were often referred to as ‘arbitrary’ or stretch targets by officers and little supporting evidence of how the targets would be achieved could be identified. This is best reflected by the fact that 32% of savings were considered unlikely to be achieved by the end of quarter one.”
The report added that “ownership of savings targets is poorly defined across the themes as none of the governance structures reviewed” had “specific and/or accurate references to the savings to be made”.
The likelihood of savings being made are assessed on the basis of being red, amber, or green. However, the report said “there is little evidence of systematic challenge or review of savings considered unlikely to be achieved” while savings that are made are “against an overall budget overspend in the service area where the saving is to be made”.
While the new approach to financial planning “is clearly in its infancy” concerns were raised using this “in parallel to previously existing structures… is adversely affecting their ability to deliver savings.”
Somerset has identified cutting more than £4m costs with commercial and third party partners between 2017 and 2020.
The SWAP report “identified several weaknesses in the corporate approach to identifying, agreeing and monitoring of procurement savings” and added: “It will be important for [Somerset CC] to address these weaknesses as soon as possible to help ensure that maximum procurement-based savings can be realised.”
A Somerset spokesperson said the council was “committed to achieving sustainability and living within our means” and added “there are early positive signs” about the planned savings for 2018-19.
“We know we need to deliver more of our planned savings and have taken steps to make improvements in that area,” they said.
This story was updated at 14.49 on 22 June to quote from the findings of the South West Audit Partnership report rather than the scope of the review, as had originally been published.