Cornwall Council’s deputy leader David Harris has denied the council’s finances are “spiralling out of control” as he revealed that overspending by the local authority has risen to £16 million so far this financial year.
He was responding to comments by the council’s former leader Julian German who asked why the authority had gone from an overspend of £8 million in the first quarter of the year to double that by the third quarter when a cost-cutting strategy had been implemented.
Speaking at a meeting of the council’s customer and support services overview and scrutiny committee on Tuesday, December 5, Independent councillor German said: “The Cabinet member told us that the overspend was going to be £8 million. We find out on September 30 that the actual overspend is £14.9 million and now the Cabinet member tells us in his report today that the overspend is £16 million. It seems to be spiralling out of control. How have we got ourselves in a position where the overspend has gone from a huge £8 million to a humongous £16 million without that being forecast?”
Cllr Harris, who is the authority’s portfolio holder for resources, responded: “The issue is the figures keep getting worse. Everything that could increase the wrong way is doing so. I don’t think we are spiralling out of control. That suggests we don’t know where we are. We do know where we are and it’s not a good position.
“My discussions with [chief operating officer] Tracie Langley are current and ongoing, and she is proposing and introducing various steps including putting additional resources into looking at every line of spending, and where we can make savings and cut costs we are so doing.
“As a council we are a lot better off than many councils but if we carry on as we are without getting a decent settlement [from the Government] in December then give it two or three years and we will have major problems.”
He added: “The area of overspend – housing, homeless, home to school children, children with special educational needs; they are areas where we have to spend money and the demand in those areas is going up, which is occurring across the country. We are taking the strongest possible steps to get the position better, but even with the best team in the world you cannot square a circle.”
Ms Langley admitted that she expected the overspend to go down rather than up.
She said: “Due to some of the controls we put in place between Quarter one and Quarter one I did expect the overspend to go down. It did not – it increased. It increased because the number of homelessness has increased, the costs have increased and the amount of home to school transport coming up to the new school year had increased, and there are some additional social care children who have come into the system who are very expensive.”
She said additional controls on expenditure have been put in place. “There have been some savings that have been really difficult to make and have slipped a bit. We are putting in some additional mitigations to ensure that the financial situation from an overspend position gets better.”
She added that there has to be enough in reserve for the 2024/25 financial year to cope with the housing and home to school transport budgets. The council announced earlier this year that its saving target for 2023/24 is £50.046 million.
Ms Langley added: “I am not expecting anything coming through from the Chancellor on December 22. In fact, you will have heard all of the rhetoric that there won’t be anything coming through for local government. It means that 2024/25 and going into 2025/26 is going to be really difficult.”
She hoped that the Section 114s introduced by Birmingham and Nottingham – which essentially signalled both councils have gone bankrupt – would mean that the “Government might move their stance a little bit” when it comes to local government funding.
Independent councillor Adam Paynter told the meeting: “Cllr Harris says ‘blame the Government, they need to give us more money in December’, Tracie’s just told us don’t cross your fingers because the chances are there’s no money coming in December. That’s the problem we’ve got – we’re not seeing a strategy of where we’re going to get those savings. It doesn’t give me confidence that the council’s moving in the right direction.”
The Conservative deputy leader didn’t pull any punches when he responded: “Looking forward, it is difficult to be optimistic as demand for those services that we have to supply is increasing. I will not sit here and say everything is brilliant. I will not sit here and say we’ve got miraculous ideas. We haven’t, but we are working like hell to try and cut our expenditure.”
Cllr Paynter later thanked Cllr Harris for “writing the opposition’s press releases by saying ‘Cornwall Council, nothing is improving’.” Cllr Harris said it was his job to tell the people of Cornwall “where we are and if I’m saying nothing’s improving that’s a statement of fact”.
Cllr German asked Cllr Harris if he would resign. He responded with an emphatic “no”.