Huge increases in demand for services to support the most vulnerable in our community has led to a projected budget overspend of £7.7 million – although initial in-year actions are estimated to reduce this by £2.1 million to £5.6 million.
A council financial report will now be considered which outlines the position and the need to make savings to rebalance the councils finances. It also calls on the Government to release more funding to address the sustained impact of high inflation and to address the inequities in an outdated funding system that fails to adequately recognise the drivers of demand and therefore costs of statutory services.
The report explains that increasing costs of £9.6 million to support our most vulnerable children is expected to be needed this financial year. This is due to greater demand for care placements for children who need protection, increased costs for school transport for children with additional needs and the need to use more agency staff, and is similar to the situation of other councils right across the country.
Other reasons for the projected overspend include higher than expected inflation and interest rates, replacing council vehicles, increasing costs associated with dealing with waste and a higher than expected pay award.
A total of £6.4 million of efficiency savings were already planned this year, with 83% of these already achieved or in progress. This includes making changes to how council buildings are used and how services are provided. Additional savings will now need to be developed for Cabinet’s consideration, to inform next year’s budget plans that will be consulted on in December.
Cllr Alec Brown, Leader, said:
“We are a responsible council and will do what it takes to provide a balanced budget while remaining absolutely determined to protect the most vulnerable and deliver on projects which will deliver economic growth to our borough. I would add that the current administration inherited this issue and has taken steps to address it immediately with weekly emergency deep dives into every directorate budget.
“We call on the Government to release more funding. Even with the huge cuts to council funding over more than a decade, the Government’s over-optimistic view of inflation led to them granting even less funding in real terms. In 2021 the Government predicted inflation would be 4% but at one point it hit more than 11% and is still nearly 7%. At the very least, the Government should take into account real inflation and interest rates and deliver fair grant funding which would have a massive positive impact on what we can deliver to our residents.”