Winter flu epidemic will affect council’s finances

Southampton City Council’s latest forecast has a £16.12million revenue budget underspend.

This favourable variance will reduce the amount of government borrowing council bosses will need to make to balance the books at the end of the year.

Deputy leader Cllr Simon Letts said the finances were “moving in the right direction” but he told cabinet colleagues at a meeting on Tuesday, January 7, that there was a caveat.

“We are now in the winter period which traditionally has been a high period of expenditure particularly in the adult, social care and health area,” Cllr Letts said.

“We are in the middle of a significant flu epidemic and that will of course bring additional costs in that area.

“It is unlikely that we will see significant further improvements on this within this financial year but we have set a broad target of around £20million to be the underspend for the year, which is a significant improvement on where we started the financial year.”

Hospitals in Hampshire are facing significant pressure after a rise in patients suffering from winter illnesses.

A critical incident was declared earlier this week at Basingstoke and Winchester hospitals by Hampshire Hospitals NHS Foundation Trust.

This move sees the trust introduce special measures to cope with full hospitals and busy A&E departments.

University Hospital Southampton NHS Foundation Trust is also extremely busy.

Residents have been asked to consider alternative services if their condition is not life or limb threatening.

Labour council leader Cllr Lorna Fielker said if people are unwell with flu symptoms they should stay at home and look after themselves.

Meanwhile, Cllr Letts, cabinet member for finance and corporate services, said the council was yet to draw down any money from the exceptional financial support (EFS) mechanism from government for 2024/25.

The in-principle approval includes up to £39.3million to cover a structural deficit in the budget.

Any underspend achieved by the council would reduce the amount of the EFS used. In turn this would benefit the council in the long term.

A report to cabinet said the current forecast of a £16.12million underspend reduced the cost of borrowing from £3.2million to £1.9million annually over the 20-year payback period.