Herts County Council heading for £13.4m overspend in 23/24

FINANCE bosses at Hertfordshire County Council are reporting an expected overspend of £13.4m by the end of the 2023/24 financial year.

Earlier estimates – based on the first three months of the financial year – had suggested that the council was heading towards a £16.4m overspend.

But the latest revised estimate – based on data from the end of September – was reported to a meeting of the council’s resources and performance cabinet panel on Friday (December 1).

The county council has already implemented a series of cost-cutting measures – including a ‘recruitment prioritisation’, freezing recruitment to all but essential roles.

But even after the use of a £10m contingency fund – set aside as part of the 2023/24 budget plans – councillors were told there was a projected budget gap of £3.4m.

Acknowledging the ‘£3m improvement’ was going in the right direction head of corporate finance Scott Walker pointed to a £16.1m projected overspend in children’s services.

And he particularly highlighted the financial pressures associated with ‘independent’ placements for ‘looked after’ children and increased fostering costs – as well as additional social care costs and home to school transport for SEND pupils.

A Children’s Services Action Plan has already been drawn-up as part of a council-wide drive to balance the budget. And all council departments have been asked to identify ‘underspends’.

However at the meeting Mr Walker told councillors that it was now harder and harder for the council to identify ‘underspends’ and that it was a ‘challenging environment’.

He also noted that ‘unfortunately’ the government’s Autumn Statement had not included any additional funding for local government.

The scale of the financial risks facing the county council were also highlighted at a meeting of the council’s audit committee on Thursday (November 30).

And at that meeting it was suggested that failure to deal with the financial challenges could lead to ‘unplanned reductions in service delivery and an inability to meet future demands’.

‘The risk to planned savings and proposals to deal with funding cuts’ was ranked as the highest risk to the council.

And the report prepared for the audit committee pointed to ‘budget gaps’ in the future.

“The latest refresh of the IP has identified significant budget gaps for 2024/25 and future years,” said the report.

“This means the financial risk is now very real and solutions need to be developed quickly over the autumn to enable the council to publish a balanced budget for 2024/25.”

The audit committee report highlighted increases in demand and costs that were out-stripping increases in funding – pointing to uncertainty over future funding and the impact of covid.

And it also highlighted the increasing difficulties in identifying savings.

“Having successfully identified and delivered over £380m in savings since 2010, remaining efficiencies and initiatives to bring savings are both more complex and riskier to achieve,” said the report.

“In this environment, there is a risk across the whole Integrated Planning (IP) period that the Authority is not able to develop sufficient and timely additional proposals to deal with these financial challenges, which may lead to unplanned reductions in service delivery and an inability to meet future demands.”