Hertfordshire County Council predicts overspend of nearly £21million due to spiralling costs and service demand

In Hertfordshire the county council is responsible for services including adult care, highways, children’s services and public health, trading standards and the Fire and Rescue Service.

And to provide those services throughout 2024/25 the council has set a budget of just over £1.1bn.

But latest data shows that by the end of June – just three months into the new 2024/25 financial year – the council had already spent £4.6million more than had been expected at that point in the year.

Increasing costs of materials, high energy prices and increased demand for council services are all said to have had an impact.

And, without action, council officers predict that by the end of the financial year that overspend could reach £20.9m – which is £0.9m in excess of the council’s £20m contingency fund.

On Thursday (October 3) the “challenging financial position” will be reported to a meeting of the council’s resources and performance cabinet panel.

According to an officers’ report, council departments forecasting overspends are being asked to identify actions to mitigate the pressures, where possible – in a bid to cut spending by £6.6m.

And where they can’t, they will be asked to take other actions.

Meanwhile all council departments are being been asked to reduce ‘non-pay’ costs where possible, in a bid to save a further £5.4m – equivalent to a 30 per cent spend reduction in areas such as printing, consultancy, mileage and training.

At the meeting it will be reported that the most significant financial pressures facing the council relate to the provision of services for ‘looked after’ children and ‘supported living services’.

And councillors will hear of “significant” underlying financial risks that could potentially worsen the financial position.

Those risks are said to include national pay negotiations and the continuing escalation of demand for social care – as well as concerns £46m of savings already planned may not be delivered.

Leader of the county council Cllr Richard Roberts has suggested that the council is “well placed” to bring down the overspend.

“Like all local authorities we are again seeing pressures on our budget in-year due to a range of external factors,” said Cllr Roberts.

“But thanks to our prudent financial planning I believe we are well placed to bring down this overspend to ensure that we can meet the challenges that are just over the horizon.

“By ensuring earlier in the year that additional funding was available we will be able to continue to support the most vulnerable while driving down on our own costs, making ourselves as efficient as possible so that every penny we spend is done to the betterment of Hertfordshire.”

As part of the budget setting process for 2024/25, the county council had chosen to increase its annual contingency from £10m to £20m.

But according to the report the aim at the start of the year was to minimise the use of the second £10m, if possible.

And the cost-cutting “action plans” now aim to reduce the projected overspend so that it is below the original contingency sum of £10m.