ST HELENS Council is forecasting an £11.077m overspend this year – almost double the figure reported just three months ago.
The authority's latest financial monitoring report also warns that its General Fund balance is expected to fall to £3.523m by March 2027, significantly below the council's stated minimum prudent level of £14.6m.
The forecast net overspend has risen from £5.617m in the previous monitoring report to £11.077m. Before one-off corporate underspends are taken into account, the projected overspend across council services stands at £13.638m.
The report says £2.561m in corporate underspends will offset some of the pressure. These are largely due to borrowing being deferred because of high interest rates and the council receiving higher returns on its investments.
Unless the authority can bring costs under control by the end of the financial year, it will record a fifth successive year of spending above its approved budget.
Children and Young People's Services account for the largest share of the projected overspend, with a forecast pressure of £12.269m – up from £7.617m in the previous report.
The council attributes this to rising costs of supporting looked-after children and care leavers, particularly external residential, fostering and supported accommodation placements.
Increasing demand for special educational needs and disabilities (SEND) support is also contributing to the pressure, including home-to-school transport, statutory assessment services and specialist support.
Adult Social Care and Health is forecasting a further £1.5m overspend, with the report pointing to rising residential and nursing care costs.
It says the number of people requiring support has remained relatively stable, but the cost of increasingly complex care packages has risen.
Other financial pressures include lower-than-expected income from the council's commercial property estate and the timing of a recovery claim linked to Church Square Shopping Centre.
The report warns that the projected General Fund balance of £3.523m in March 2027 would be significantly below the £14.6m minimum prudent level set out in the council's Reserves Strategy.
The authority has transferred money from earmarked reserves to replenish the General Fund since 2021/22 and expects to make another transfer this financial year.
However, the report says the scale of the shortfall means it is unlikely the full gap can be closed through measures taken during the year alone.
The council expects to deliver £3.954m, or 71.36 per cent, of the savings included in its financial monitoring position this year. A further £1.587m may not be fully delivered because of implementation delays.
The report warns that, if the council's financial trajectory is not addressed, the risks to its long-term sustainability will increase.
It says the authority could, in the medium term, require Exceptional Financial Support from Government if decisive action is not taken to contain and reverse current spending trends.
However, the council has said it is not seeking Exceptional Financial Support.
A St Helens Borough Council spokesperson said: “Like many local authorities across the country, the council continues to face significant financial pressures.
“The increase is largely driven by growing demand and cost pressures within children's services and adult social care – two of our most demanding areas – together with income pressures in other service areas.
“The most significant challenge remains within children's services, primarily due to rising costs associated with supporting looked-after children and care leavers, including external residential, fostering and supported accommodation placements, alongside increasing demand for SEND-related services.
“One of the five missions within our new Council Plan is to deliver robust finances and efficient services, and the council remains committed to achieving this ambition despite the significant financial challenges facing local government.
“We agreed a robust Reserves Strategy as part of the Medium Term Financial Strategy agreed in March and will manage balances across general and earmarked as part of the annual budget setting process.
“The council is not seeking Exceptional Financial Support from Government. The focus remains on improving the in-year position through spending controls, delivery of savings plans and ongoing financial management, while closely monitoring the council's overall financial resilience.”
The financial monitoring report is due to be considered by the council's Cabinet on Wednesday, November 18.
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