Sharp increase in looked after children drives council overspend

The authority was overspent by £6.8million for external children’s residential placement costs in the most recent financial year, with the numbers of children requiring placements “far exceeding” the amount anticipated.

However, despite the extra demand pressures in both children's and adults social services departments, the council emerged from the last financial year “as well as can be expected”, reports set to go before full council next week will say.

Out-turn figures for the financial year which has just come to an end show that the authority was able to reduce an estimated overspend of around £15million, with the final figure ending up at just over £7.8m, or around 3 per cent over budget for the year.

However the report authored by council head of finance James Walton outlined the ongoing pressures on council reserves, which were “below a level that would be regarded as safe” at the end of the period.

“The financial results for 2023/24 are better than anticipated, but remain significantly adverse. This highlights an ongoing risk that effective action to address and improve the forecast was not able to be delivered within the year,” the report said.

“The financial position of the Council will be significantly challenged through the new year, 2024/25, as the Council must reduce planned spending from circa £771m to circa £709m in order to remain within available resources.

"This £62m spending reduction exceeds the previous year as the largest savings programme the Council has ever undertaken.”

The figures highlighted specific areas of overspend, with demand pressures spiking in both childrens and adults social care departments.

Children’s social care and safeguarding overspent by a total of over £3.3m despite a cash injection of £11m from the general reserve fund, driven by what the authority says was a sharp increase in the requirement for external placements.

The figures showed that 57 external residential ‘spot’ placements were in place over 2023/24, with efforts to move children on into foster placements also hampered by a lack of fostering capacity in the county.

Meanwhile, extra fostering placements resulted in an overspend of £2.4m, with the majority going on external fostering costs.

The report notes that “demand has increased significantly over the last few years so there is emphasis on preventing demand in to the social care system early through family support.”

Elsewhere, an extra £15m of spending in adult social care purchasing budgets due to a higher than expected number of service users was partially offset by a transfer of £9.5m from reserves and an extra £4m of client contributions to care costs.

The figures will be discussed in full at a meeting of full council on Thursday, July 18.