Suffolk County Council projects a 4% overspend (£29.3m), to be partially offset by an additional Section 31 grant from Government, and additional income from the pooling of business rates with the district and borough councils in Suffolk, totalling £7m.
Councillor Richard Rout, Suffolk County Council’s Deputy Leader and Cabinet Member for Finance and Environment, said:
“Despite being able to publish a balanced budget in February, we are already having to spend more than we anticipated this year.
“We set this year’s budget during a period of highly uncertain economic conditions. Even although the country is now starting to see price rises slowing and energy costs beginning to drop we are still suffering the cost impacts of various global shocks - in particular COVID-19 and the war in Ukraine.
“We are experiencing unexpectedly high demands on certain services, meaning some are spending disproportionately more than others. For example, costs for school transport and children in care make up two-thirds of the total overspend.”
Details of the main areas of overspend are:
- School transport - forecast to overspend by £11.4m (39% of the overspend), with £8.3m of this being travel costs for children with special education needs and disabilities (SEND). This is largely due to more children with SEND needs, transport operators being in limited supply, and rising costs from those operators who are also feeling the impacts of inflation, especially fuel costs.
- Children in care - forecast to overspend by £8.2m (28% of the overspend). The council has a responsibility to provide care for children and young people under the age of 18. Some of these have incredibly complex needs requiring 24-hour care from multiple carers. There is currently an unexpectedly higher number of children requiring this support, with this costing an average of £22,700 per week, per child.
- Adult care services - forecast to overspend by £3.5m (12% of the overspend) for purchasing care, due to increases in demand, and staffing costs in the sector. The fees paid for residential and nursing placements remain high with 64% of new residential and nursing packages being above the published rate of £806 per week, with some specialist packages being over £1,500 per week.
- Inflation - inflation and interest rates have been higher than experienced in a generation, with the legacy of COVID-19 continuing to have a significant impact of on various services. As an example, there is an estimated £3.0m (10% of the overspend) pressure as pay settlements continue to be above historical norms as inflation has remained stubbornly high during 2023 so far. High interest rates mean it has been more costly than anticipated to borrow money, which the council does to help fund big projects, such as upgrading highways, maintaining schools or developing household recycling centres.
In addition to the net overspend of £22.3m from this main budget, the council is forecasting an overspend of £15.8m against its £256.5m budget from the Dedicated Schools Grant and Pupil Premium Grant. This is money from Government specifically to fund schools and services for pupils. This overspend comes solely from resources spent on Special Educational Needs and Disability (SEND) provision, not including school transport. Suffolk, like many other local authorities, is seeing a continuous increase in demand which is not being met by the same level of increase in funding.
Despite these challenges, council departments continue to make savings. This year’s budget identified £25.1m of savings to be made, and the latest figures show that £20m of this is projected to be achieved.
Councillor Richard Rout continues:
“Our officers continue to do great work for Suffolk residents, including providing complex levels of support to those most in need, whilst making savings.
“But with these increasing demands and costs, we are seeing councils around the country having to reduce services and put spending freezes in place, so that they can balance their budgets for this year. Unfortunately, we must now have these discussions too.
“For many years, we have made savings through our transformation programmes – essentially ways of working smarter and leaner whilst still delivering services. We have also built up an appropriate level of reserves, meaning we have savings which we are able to call upon now.
“But this is not sustainable and now that Cabinet has been presented with the council’s first financial report for this year, we will work with directors to help reduce this predicted overspend.”
The Cabinet at Suffolk County Council will discuss the Q1 2023-24 Revenue Budget paper, at its meeting on 12 September 2023.
Cabinet papers are published on the Suffolk County Council website.
