FINANCES at Dorset Council are improving – although the authority could still be facing a budget gap of £4.77million at the end of the financial year.

At the end of the first quarter the predicted short-fall was just under £4m.

Brief holder Cllr Gary Suttle says there has been an improvement in income in some areas, including business rate collection, as many companies are now trading again at something like normal levels.

He told Monday’s Cabinet that the council was also seeing increased savings from the transformation from six councils into one although, partially because of Covid, there remained high spending in social services.

Predicted overspends next April include £9.1m for adult services and around £3m for both children’s services and the Place directorate.

The council has an annual budget of £312m for the current financial year, funded mainly from council tax which brings in £264m; business rates £44m and general grants of £4m.

Cllr Suttle said that although business rate collection had improved there remained concern over the level of closures which would ensure a shortfall on the target collection rate until empty properties were again occupied.

Business rate income has been down on the previous two years in every month until September when the 52 per cent collected topped the 51 per cent rate in 2020-21, although was six per cent down on the 2019-20 rate.

In a report to councillor executive director of corporate development Aidan Dunn says it remains difficult for the authority to work out how much of the continuing budget pressure is driven purely, or principally by the pandemic.

“There remains a large degree of financial uncertainty and having reviewed expenditure for the first half of the year, Dorset Council’s prudent financial forecast is a £4.771m budget pressure caused by a combination of increased demand and reduced income streams.

“This represents a significant improvement from the quarter one position, and it is really important that we maintain the momentum of our improving financial position. The Council can never relax with its budgets and we need to be continually thinking about how to achieve best value for money and how to further improve our efficiency.”