Wokingham Borough Council overspent by £1.5 million in the 2001/02 year, on a revenue budget of £125 million. Financial reporting weaknesses meant that the overspend was not recognised until the 2002/03 year.
Delayed awareness of the overspend compounded problems and meant that the Council was heading for a £3 million deficit by the end of the 2002/03 year. The Council’s General Fund Reserves then stood at only £3 million.
The Council focused on making cost reductions to bring the budget under control, but recognised it was also essential to consider the factors that caused the overspend and to limit the Council’s exposure to similar problems in the future.
As a result, a comprehensive and effective risk management strategy was adopted. Each service now produces alongside its service plan a service risk register, with the most severe risks on the service risk registers being entered onto the corporate risk register for consideration by the corporate management team to oversee action that removes or mitigates that risk.
A wide range of service and financial risks were identified, addressed and either resolved or mitigated by the Council. The programme of risk management played a central part in the authority’s improved performance in service delivery and financial management.