A slump in income from the Baldovie waste energy plant is forecast to hit Angus Council’s annual budget by more than a million pounds.
And it is predicted to be part of a £2m deficit just one authority department is facing before the financial year end.
Waste from Angus and Dundee councils is diverted from landfill to the Baldovie operation in the north of the city.
The MVV Environment Baldovie (MEB) contract delivers a gainshare deal for each council.
In 2021, capacity at the site was expanded with the installation of a second incinerator in a £125m investment.
Finance director’s forecast
But in a revenue budget report to be considered by councillors next week, Angus finance director Ian Lorimer is warning the financial performance is not as expected.
An infrastructure and environment deficit of £2.04m is the largest departmental deficit on the balance sheet for this year.
It represents more than 5% of the infrastructure revenue budget.
Mr Lorimer says: “The main reason for this projected deficit is due to a projected shortfall of income from the MEB waste contract gainshare based on the latest information from the contract manager (£1.242 million).
“MEB waste disposal costs (are) projected to be higher than budget (£0.35m) due to higher than expected inflation and waste volumes.”
Children, families and justice is also facing a budget deficit – almost £1m (3.65%).
Other departments, including finance, vibrant communities and education, predict savings.
It means an overall £4.9m deficit forecast in December has shrunk to just £821,000.
But the finance director warns that includes one-off or ring-fenced savings.
Raid on reserves
And it could mean another dip into the piggy bank.
Mr Lorimer says: “Budget monitoring in the current climate of high inflation, unpredictable demand and complex belatedly agreed pay deals continues to be very challenging.
“If the final year end position was to be a deficit of £0.821 million it would be necessary to meet this from the council’s reserves on a one-off basis.
“This is also likely to mean additional savings having to be delivered in future years to compensate for any budget shortfalls of an ongoing nature.”
The update comes as council chiefs delivered a warning to Angus residents to brace themselves for cuts in this year’s budget.
In an online animation it warned: “We can’t pretend this won’t hurt.”
It hinted ar reduced road maintenance and redesigned services.
Angus has to find around £60m of savings in the next few years after already slicing almost £80m from the balance sheet in the past decade.
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