Hertfordshire County Council expected to overspend by £20m this financial year

Increasing demand for social care services – and mounting costs – are said to be among the “significant financial pressures” that have seen council spending increase.

And on Monday (2 December) the latest financial position – based on the first half of the financial year (April to September) – was presented to a meeting of the council’s cabinet.

According to the latest data the council now expects to overspend by around £20.1m by the end of the 2024/5 financial year.

However the allocation of a £20m for ‘contingency’ in the 2024/5 budget will see the overspend reduce to £100k.

Overall the county council manages an operational budget of £1.1billion.

At the meeting executive member for resources and performance Councillor Bob Deering said that the financial environment in which the council was operating remained “extremely challenging”.

But he addressed the predicted overspend within the overall £1.1bn budget

“In quarter 1 we were predicting an overspend, come the end of this year, of about £21m,” he said.

“We are now projecting an overspend, come the end of the year, of approximately £20m.

“That sits in the context of an overall revenue budget line in excess of £1bn.

“So it could be said that a £20m overspend in the context of £1bn is within expected tolerances. But nevertheless it’s very difficult for us to find the £20m.”

Councillor Deering suggested that they had foreseen the “difficult situation” they would be faced with this year – increasing the council’s ‘contingency’ budget from £10m to £20m.

And he said that £20m contingency would “balance out” the predicted overspend – “expecting it to end the year more or less in balance”.

In explaining the “very challenging” situation he pointed to the “almost exponential demand” from residents for adult and children’s services.

And he also pointed to the £46m of planned savings that were being made by the council this year – in addition to a further programme of savings launched mid-year.

“So the upshot is that almost certainly by the end of this year, in terms of in-year savings, we will have saved about £50m compared to last year,” he said.

“That is a huge achievement, but nevertheless the pressure remains.”

Addressing the areas of overspend in adult care, executive member for adult care, health and wellbeing Councillor Tony Kingsbury highlighted the overspend of “around £10m” predicted in adult disability services.

“Whilst this is only two per cent of the net budget it is a really important issue to address,” he said.

“And it is primarily due to a higher than budgeted number of people in supported living with increased average costs.”

Councillor Kingsbury reported that an action plan had been produced targeting key areas of pressure, measures to improve financial oversight and decision making.

And he said success in these actions was crucial to reducing the current overspend, and looking forward to a difficult budget that is coming, and managing future financial pressures.

Meanwhile executive member for children, young people and families Councillor Fiona Thomson addressed the increasing demand for children’s services – including the costs of independent placement for looked after children.

She also referenced the increase in employers’ National Insurance contributions, that she said would equate to about £2m in children’s services, that “could be spent supporting children, young people and families”.

And she catalogued a number of measures they were already looking at to reduce spending.

These included the residential strategy to build more children’s homes and greater provision of ‘in-house’ fostering, which she said would not only save costs but would be better for children and young people.

But she also suggested support was required from the government – pointing in particular to independent placement providers and ‘profit caps’.

The data presented to the cabinet is based on financial data from the first half of the 2024/5 financial year, running between April and September.

It was discussed at a meeting on Monday , which can be viewed online.

Meanwhile at the meeting of the cabinet, executive member for resources and performance Councillor Bob Deering called on the government to “sort out” the funding allocated for children with special educational needs and disabilities.

High needs funding is provided by the government to support pupils and students who need additional resources to participate in learning.

And this year Hertfordshire was allocated a total of £196.4m though the ‘high needs block’.

But at the meeting of the cabinet on Monday it was reported that the high needs budget was expected to overspend by £12m by the end of the financial 2024/25 year.

“There are other counties – major counties – that are in very substantial deficit in their high need block,” he said.

“We are not in that position, but the direction of travel is heading that way.

“And I am going to take this opportunity […] to say that this government must sort out the high needs block. It is not optional, they must sort it out.”

Executive member for education, libraries and lifelong learning Councillor Caroline Clapper stressed that the county council was already conducting “an awful lot of lobbying” on this issue.

And she told the meeting that the council had now commenced regular meetings with all Hertfordshire MPs, where they would receive regular briefings about the situation.