Worcestershire County Council anticipates £12.5m budget overspend

A report indicates that Worcestershire County Council’s leadership must intensify efforts to prevent a projected £12.5m overspend for the current year. The authority has acknowledged that increased costs, exceeding initial expectations, are due to inflation, higher demand for services, and social care placements. This anticipated overspend occurs even though councillors approved £37.2m in savings and reforms for the local authority’s 2024/2025 budget, alongside the intended utilization of £7.9m from reserves. The council’s Conservative-controlled cabinet is scheduled to discuss a financial report next Thursday. The council’s resources report noted, “This financial year continues to be a challenging time for local government and the County Council is no exception.” The budget review assessed the council’s financial standing as of the end of September, marking the halfway point of the current financial year. Although the report indicates a slight improvement in the projected overspend since June, this follows the deployment of £7.9m from the county council’s risk reserves. Furthermore, the report stated that the majority of the predicted overspend is attributed to demand in adult and children’s social care, home-to-school transport, and the council’s capacity to meet its savings targets. Within adult social care, an overspend of £4.7m is being incurred due to escalating costs and a growing demand for placements. The local authority currently finances care packages for over 7,000 individuals. Support for looked-after children also significantly contributes to a projected £7.6m overspend in children’s services. The resources report additionally indicated that not all of the £37.2m in savings and reforms planned for the financial year are expected to be realized, with £4.9m being “unallocated and at risk of non-delivery”. It concluded that without the introduction of additional budgeting measures, the current year’s £12.5m overspend would necessitate funding from further reserves.