Financial risks to Dorset Council's budget classed as 'high'
The local authority is warning making savings is becoming increasingly difficult
The financial risks to Dorset Council’s overall budget has been classed as “high” – with an warning that making savings has become increasingly difficult.
A report to Cabinet says that to avoid significant over-spending departments will be asked to find further savings within the coming months to minimise the use of reserve funds.
Details from the report show that the financial situation has worsened by £1.6million over six months with a prediction that the council could be just under £12million adrift, unless more savings are achieved, by the end of the financial year.
The worsening situation comes about despite some savings plans already started and an injection of additional Government funding.
The council’s senior financial officer has already said that there is no risk of the authority facing the problems seen at some other councils but will still need to keep a tight grip on its spending.
Forecasted overspending
Forecasts to the end of the financial year in April 2024 suggest children’s services could be 4.3% above budget with an overspend of £3.3m. An extra £450,000 will have to be found, above grants given by the Government, for looking after 67 asylum seeking children allocated to the county, although this is less than the £770,000 predicted overspend for children who are disabled.
The council’s current weekly costs for just over 400 children in its legal care amounts to £549,000 – higher overall numbers than many similar counties with an acknowledgement that too many are still being cared for out of Dorset, adding to cost pressures.
Adult services follow a similar financial trend with the end of year budget expected to reach £150.5million, compared to the £147.7m planned for at the start of the year. Much of the increase has come from providing additional care packages, giving a gross cost for adult care up from £3.2m a week in April to £3.4m in September.
Report to Cabinet
In a report to today's (7 November) Cabinet meeting, corporate director for finance and commercial activities Sean Cremer says: “The operating environment for Local Authorities across the UK remains challenging given the ongoing impact through the recovery phase of the pandemic as well as international conflict driving inflation. These external factors are bringing pressure to bear through increased demand, rising costs and reducing funding. As a result effective control and monitoring of activities and budgets has never been more important.”
His report outlines than £225.5million, or 64per cent, of the council’s service budget of £353.7m is spend by the adult and housing and children’s directorates.
These areas, like others, have seen some inflation figures at record high levels, adding significantly to predicted costs.
Said Mr Cremer: “Pressure on prices continues to build and these affect a significant quantum of the Council’s budget. Whether directly, through the goods and services we buy, or indirectly, such as those costs incurred in our supply chain that are subsequently passed on to us, prices are under pressure, meaning that the risk is escalating.”
The senior officer says that the council’s budget is essentially fixed in cash terms while at the same time the ability to raise income is limited. He warns that there is also the risk of further Government-led policy changes in the pipeline for social care and education which, he says, could make implementing policy ‘extremely challenging.”
The figure provided to councillors suggest that motorists who have complained during the year about big parking fee hikes are unlikely to hold much hope of lower charges to come – the report says that the highways team is now predicting an end of year overspend of £2.65m, £1.87m worse than before – mostly relating to car parking income not meeting the targets the council had set at the start of the financial year.
Almost every area of council activity is now predicting an overspend with the only underspends expected to come from areas where staff vacancies have not been filled.