Wiltshire Council missing £5m, but no-one knows where it went
It's believed to be due to an overspend on Adult Social Care
A £5 million – or maybe £6 million – sinkhole has opened up in Wiltshire Council’s finances and no-one has been able to explain what caused it, why no-one saw it coming, or whether the hole actually exists at all.
The Lib Dem administration revealed last week that it had found a a £4.8 million deficit in the council’s finances, although Conservative leader Richard Clewer says it is closer to six million and Lib Dem leader Ian Thorn was this week happy to split the difference at “£5 million-plus”.
The bulk of the overspend – everyone can agree – is in adult social care, the delivery of which is one of the council’s key responsibilities.
The deficit is about one per cent of the council’s entire budget and the sinkhole will have be to filled – as local councils have a legal obligation to balance their books at the end of the financial year.
At an extraordinary meeting of Wiltshire Council’s cabinet yesterday (Tuesday) members were asked to approve a raid on several council’s reserves to present a balanced budget.
£700,000 will be taken from the Pay Award reserve, £700,000 will be taken from the Waste reserve, £2 million will be taken from the Transformation reserve, and £1.44 million will be taken from the Insurance reserve.
Those reserves, councillors were told, would have to be replenished at some point – although there’s no news yet on how that might be achieved.
The budget-balancing plan was unanimously waved through by members of the cabinet.
But during discussions surrounding the matter, it became clear that no-one knew how the overspend had happened. The Lib Dems said the money was missing when they took over, the Conservatives said it was there when they left, and the council’s chief executive said both things were true.
The problems stem from when The Care Act 2014 came into effect in April 2015. The act changed the way councils provide adult social care – and made the exchange of funds between the council, care recipients, and external care providers extremely complicated.
In 2024, the previous Conservative administration hired consultants to look into the “highly complex process” of delivering adult social care.
The consultants found 21 “problem areas” that needed to be addressed, and 10 projects were established to address them.
Financial estimates of the cost of providing care have fluctuated – sometimes so much so that, by the admission of the council’s chief executive Lucy Townsend, staff were “not confident” in the numbers.
During Tuesday’s meeting, Cllr Thorn sought to reassure the public that measures would be put in place to ensure such an overspend never happened again, while his predecessor Cllr Clewer attempted to establish how such a large deficit could have happened when there was no sign of an overspend when the election was called.
Cllr Thorn said: “To be two or three weeks into our administration and to find the level of deficit that we found was deeply, deeply disappointing. And it’s particularly disappointing given the likely impact the deficit will have on delivery when we come to discuss the budget next February.
“We have to ensure that this does not happen again. There is a program to address the issues that contributed to where we are today. I want this delivered as quickly as possible to ensure that we won’t have this type of threat or surprise again.”
Cllr Clewer countered: “I was shocked, surprised, and extremely disappointed when the outturn came out because there was no indication as of Quarter 3 of this extra £6 million being overspent.
“Last year there was an initial overspend in Quarter 1 and a lot of work was done by my administration to bring that under control.
“So to go from a position in Q3 where we would be in a balanced position to find at the end of the year an extra £6 million (deficit) was extremely strange, to put it mildly.
“This raises some very serious questions: When did this become apparent because when the election was called there was no sign of it? And there’s no explanation as to where this extra £6 million has come from. What confidence do we have in these numbers?”
Lucy Townsend, chief executive of the council said: “We absolutely didn’t have this figure (when the election was called). It was something we became aware of quite late.”
She added: “It’s not about blaming any particular department. Teams need to tools to undertake their functions, and systems have not assisted us. I understand that there are still questions and I’m sorry I’m not in a position to fully articulate.
“The numbers have fluctuated over the years. Some reports showed an overspend, but we didn’t have confidence in those numbers.
“As the work has continued we have started to increase our level of confidence and we are identifying issues such as this figure.
“Our levels of confidence are increasing but there is no guarantee at this juncture, but I’m confident we will get to a position where we can have those guarantees around these figures.”
And Lizzie Watkin, corporate director – resources, added: “There is always an element of estimation. It is those areas that take judgement. We have been seeing numbers being quite volatile. The issue with adult social care is that any very small proportion of change is a very big number.”
When the overspend was discovered, a rapid scrutiny subcommittee was convened. Spokesman Cllr Nabil Najjar (Conservative) said: “The subcommittee sought to established how the deficit had arisen and why the problem had not been identified by officers earlier.
“Whilst we feel that partial explanations were provided there was an acknowledgement that the Q3 forecast was wrong and questions remain as to why that was the case, and whether current data can be trusted going forwards.”
“The committee recommends that officers in finance and adult social care work quickly and proactively to identify flaws in modelling and report back to the Overview & Scrutiny committee with a revised forecasting methodology and an explanation of how data collection and analysis will be amended.”
The program of work to make forecasting adult social care finances more reliable is due to be completed by December.
Meanwhile, the Lib Dems have decided to replace the previous administration’s finance task force with a finance scrutiny committee whose findings – say the administration – will carry far more weight.