This money comes from a variety of sources, including: the council tax you pay, grants received from the government, business rates, and our savings.
When we agreed how we would spend the £688.1m, it was a very uncertain time, with inflation and interest rates very difficult to predict. Just like you, the council experiences the costs of things going up. Our gas and electricity bills have increased, and the items and services that we need to buy have gone up too.
All this means it’s been incredibly tough to predict how much things will cost for the rest of the year, not to mention more and more Suffolk residents depending on the services we provide.
So, as we look at our financial projections after Quarter 1, we predict that we will need to spend £29.3m more than we had planned for.
It is a position which many other councils across the country are finding themselves in – and from what I have read so far, much of that overspend is due to inflation and increasing demands and costs for adult care and children’s care.
In Suffolk, this is very much the picture for us too. Of our £29.3m projected overspend, two-thirds of that comes from just two areas: transporting children to and from school (in particular children with special educational needs and disabilities, or SEND), and children in care.
Getting children to and from school is something that we are legally required to do. But we continue to see more children with SEND needing transport, and some of these cases can be quite complex and require long journeys. And of course, transport prices have been increasing, the taxi and bus companies that we work with have had raise their costs too. If you have a vehicle, I’m sure you’ve been experiencing a much greater spend on petrol, diesel, or even electric. There are hundreds of vehicles and coaches taking thousands of children to school every day, so the fuel costs alone have a much bigger impact.
We also have a responsibility to look after children who need our care, and we make no apologies at all for that, trying to give them the best life possible. A small number of these children have incredibly complex needs, needing 24/7 care and multiple carers at a time, which becomes very expensive.
Separate to the £688.1m budget, there is a different pot of money which we are given by government, totalling £256.5m, called the Dedicated Schools Grant and Pupil Premium Grant. This can only be spent on schools and services for pupils. With the demand for SEND services ever-increasing, and costs to provide these services increasing, this area has a projected overspend of £15.8m. Like the experience of many other councils, the continuous increase in demand is not being met by the same level of increase in funding.
We have a strong track record of managing council finances, but these are unprecedented times and the pressures that impact us in Suffolk, are impacting councils around the country.
In recent years, the council has had excellent financial management, constantly adapting to operate in a more cost-effective way, whilst not losing any frontline services. In fact, many teams within the council are continuing to make savings, we’re on course to make £20m of savings this year.
We have also built up appropriate reserves, to use when difficult times arise. And to be honest with you, these are now difficult times, and we are having to use these savings. But that’s not sustainable.
Our Cabinet meets next week (12 September 2023) to get a better understanding of our current position and consider our next steps and the impact on the 2024-25 budget setting process.
