A Suffolk council predicts it will overspend its general fund by almost £700,000.

A report considered by Babergh District Council's cabinet today showed a forecast overspend of £693,000.

This is the difference between expected spending in February's budget and what is forecast now.

Cllr David Busby, cabinet member for finance, assets and investments, said: "What a difference 12 months makes. This time last year, we were optimistic and looking at an underspend in our general reserves.

"As a result, we decided to set a tight budget. Had we realised what we were about to face, I think we would have been a little more cautious.

"We are now about £700,000 over budget, largely due to increases in staff costs and the delay in the Endeavour House move."

With the Endeavour House point, the councillor was referring to delayed plans for Babergh and Mid Suffolk councils to move to just one floor at their location in Ipswich. According to the report, this caused a difference of £48,000 from budget.

The overspend will be offset partly by the council's £500,000 inflationary pressure reserve that was set up in 2021/22 and also by using a portion of its strategic priorities reserve.

The general reserve holds the money spent on most council services, while a separate housing revenue account (HRA) is used for its housing stock.

Another report discussed today showed an expected deficit of £313,000 for Babergh District Council's HRA, despite a surplus of £511,000 budgeted by the then cabinet member, Conservative Simon Barrett, in February.

Conservatiive Sinon Barrett delivered budget which is set for huge overspend

Speaking about the HRA deficit, Cllr Busby said: "We have seen our own costs increase and we have also had to employ contractors and consultants.

"Our budgets have been blown out of the water due to these costs, and it doesn't look like this issue is going to change next year.

"We have got a lot of work to do on the housing front."

The estimated income from the HRA has actually increased by one percent, but this is offset by an uplift in the expected expenditure of six percent.

Repairs and maintenance led to the highest variance from February's HRA budget – at £527,000.

Cllr Busby admits Babergh deficts

Cllr Busby explained that this was caused by the backlog from Covid as well as increased costs and materials shortages.

If the forecast proves to be accurate, the total money left in the HRA at the end of March next year will be nearly £17 million.

Babergh District Council joined Mid Suffolk District Council, whose cabinet today discussed reports showing a deficit of £675,000 in its housing stock and an £839,000 overspend in its general fund.