A report on the council’s finances up to the end of September 2024 (six months into the financial year) shows how its forecast overspend has reduced by £2.5m.
The report, which will be discussed at the council’s policy and resources scrutiny meeting next week (Wednesday, 7 November), shows the continued pressures facing the council and the actions that will continue to reduce a forecast overspend of around £5.6m by 31 March 2025, and therefore deliver a balanced budget.
The report highlights the scale of the national issue regarding children’s social care costs, with the average residential social placement cost now currently running at £352,000 per annum per child (up from £335,000 in period 4). This has been steadily increasing since 2016/17 and is now well above average inflationary rises since the end of 2022/23. The average price of a residential care placement is also now 76% higher than it was in 2021/22 and has further increased by 24% from 2023/24. Reserves earmarked specifically for this purpose have been released to help deal with this ongoing pressure.
Other pressures include a forecast overspend of £620,000 in waste disposal fees for non-recycled waste, and the number of people in temporary accommodation—which, although below the national average, has seen a 50% increase year on year, up from 35% just two months ago. This is creating a forecast overspend of £770,000 in temporary accommodation costs.
Cllr Daniel Cowan, Leader of the Council, said:
“This report shows where we are halfway through the financial year, and I am pleased that our forecasted overspend is moving in the right direction—this shows that although we face challenges, these are being tackled and dealt with.
“Whilst many councils are moving to issuing section 114 notices, this is not an immediate risk for this council. Indeed, the stage before that is asking for additional exceptional financial support from the Government, and this is not being considered. However, we must remain vigilant and respond positively to the financial risks that the local government sector is experiencing.”
Cllr Paul Collins, cabinet member for finance, assets, and investments, said:
“The current forecast overspend has reduced to £5.6m and from 2% of our gross budget to 1.5%. However, continued action will be taken to bring it back in line by the end of March 2025. Whilst our finances continue to be well-managed, our financial situation remains challenging with 75% of our service budget pressures coming in statutory social care services. The Chancellor’s announcement of additional funding for these areas yesterday was welcome, but we await more information as it becomes available in the coming days.”