Cornwall Council has overspent by almost £15-million in the period from July to September, an increase of £7-million since the first quarter of the 2023/24 financial year.
The growing financial pressures on the local authority are outlined in a report to the council’s cabinet, which meets this week.
The council performance report for quarter two shows an overspend of £14.9-million. The main areas continue to be in home to school transport (£5-million), housing temporary/emergency accommodation (£8-million) and housing benefits (£3.9-million). In addition, since the first quarter of the year, children in care services have seen increased costs with an expected overspend of £4.3-million alongside council pay inflation of £4.1-million due to an anticipated pay award.
The report states: “These pressures are partly offset by a one-off underspend of £7-million in capital financing and interest receipts due to slippage in the capital programme and favourable treasury management activities.”
The saving target for 2023/24 is £50.046-million. It is anticipated £41.502-million (83%) of these savings will be delivered during that time, with £29.084-million already delivered. The report recommends to full council that its capital programme be uplifted by £6.315-million.
The council announced in September that it will need to cut some services as it faces “difficult decisions” to achieve almost £75-million in savings by 2028. Its draft budget for 2024/25 sees council tax increasing by 4.99 per cent, which will result in a Band D charge of £1,892.75 for the Cornwall Council element of the charge. This is an increase of £89.96 (£1.73 per week) compared to 2023/24 in the second consecutive year of the maximum allowable rise without requiring a referendum.
A budget and savings review group has been set up in response and the local authority’s overview and scrutiny committees are also focused on reducing budget overspends.
“It is important to note that the financial forecast for the year ahead continues to carry significant inflationary risks. If these risks materialise and mitigations are not put in place, then the overspend would increase,” adds the report, which has been overseen by chief operating officer Tracie Langley.
The report states that “demand management strategies” are being developed to tackle the main drivers for this year’s overspend – housing and school transport. “Whilst further work is needed on these strategies, at this stage, recurrent growth of £3-million has been built into the 2024/25 draft budget for home to school transport.”
The report also highlights an ongoing funding risk within the Spaceport programme in Newquay, specifically in relation to grant funding “due to subsidy control issues”. It states the matter should be resolved by December.
The council is currently undertaking public consultation in respect of budget proposals for 2024/25, which comes to an end on November 12 and the results of which will be reported to the cabinet on February 7, 2024.