Suffolk CC is projecting a £8.6m overspend this financial year, largely driven by rising demand in children’s services.
Almost £5m of the projected overspend – equivalent to 1.7% of the council’s £501m net revenue budget – is attributed to rising demand and increased costs relating to services for looked-after children, youngsters requiring specialist social care and home-to-school transport.
There are also projected overspends in adult social care (£1.5m) and corporate services (£1.8m), largely due to pressures in not achieving income targets.
At the same point in 2017-18, Suffolk forecasted a £7.8m overspend which was eventually reduced to £5.2m by the end of the year.
Richard Smith (Con), cabinet member for finance and assets, said: “I think most people have some awareness that local councils are facing enormous financial challenges, but it’s figures like these that bring the scale of the issue into sharp focus.
“We have seen Northamptonshire County Council effectively go bust in recent months. I want to reassure people that Suffolk is not in that position, but that does not mean we can be complacent either.
“There are going to be some tough calls to make in the weeks and months ahead, but they are calls we are going to have to make to keep Suffolk County Council within budget. At all times we will work to protect the most vulnerable people that rely on us for support and care.”
In a bid to try and control costs, about £4m of the pressures in the children and young people department is being partially offset by the creation of a contingency from vacancies as well as savings and underspends from within the education and learning, and early help services.
Transport contracts for hundreds of children are also being renegotiated, while Suffolk said it is “strengthening its contract management to get better value for money” in adult and community services.
A “line-by-line” review of corporate services budgets is also taking place.
Geoff Wilson, Suffolk’s interim chief accountant, said in a report due to go before cabinet next Tuesday that the council “no longer holds carry forward reserves for individual directorates” so any overspend at the end of the year will have to be met from general reserves.
“Financial resilience and sustainability are essential, but both are difficult to achieve in the current financial environment,” said Mr Wilson. “Nevertheless, firm management action is being taken to manage the short term financial pressures and develop strategies to meet the long-term challenges that face the council.”