Devon County Council’s (DCC) latest budget forecast has been blasted by a senior member as ‘the most depressing finance report I have read’.
The authority anticipated a £28.1million overspend for 2019/20 in September, saying its month four of the financial year position was ‘always the worst’.
However, a report to next Wednesday’s cabinet meeting states that, at month six, the council is now projecting that figure to be £32million.
Councillor Alan Connett, leader of the Liberal Democrat Group said: “This is the most depressing finance report I have read in over 10 years as a county councillor.
“The Government is short-changing Devon and it is affecting schools, children with special needs and vulnerable adults.”
The report by the county treasurer says the total projected overspend at month six is £5.3million – £1millon more than at month four.
But planned contributions to reserves of £8million are not expected to be made this financial year, which takes the overspend on ‘general fund’ services to £13.3million.
And the Dedicated Schools Grant funding shortfall relating to special educational needs and disabilities has also increased by £2.9million to £18.7million.
It is recommended this is carried forward to future years as a ‘negative reserve’.
It means the combined deficit currently projected is likely to be around £32million.
Cllr Alan Connett added: “Government funding for children in Devon is simply failing to meet the needs across the county.
“The Conservatives running County Hall admit the debts are too much to manage.
“They plan to put this on the council ‘credit card’ while hoping to pay it off in years to come. This is likely to mean more cuts to services in future.
“It is proof, if ever it were needed, that Devon’s schools, children and vulnerable adults are being short changed.”
The budget position in the report outlines:
- Adult care and health services are forecast to overspend by £6.7million;
- Adult care operations is forecasting to overspend by £6.6m, primarily the result of residential and nursing price and volume pressures, as client numbers are 125 higher than budgeted for;
- Adult commissioning and health is forecast to underspend by £347,000;
- Mental health is forecasting an overspend of £412,000, with pressures being experienced from higher client numbers than the budgeted level;
- Children’s services are forecasting an overspending of £6.6m;
- Children’s social care is forecast to overspend by £4.4m.
- The total overspending on children’s placements is forecast to be £1.3m due to a lack of sufficiency in the residential market leading to young people being placed in alternative settings with high cost support packages;
- Disabled children’s services are forecast to overspend by just under £1.9m, although a significant proportion of this forecast is associated with one exceptionally high cost placement;
- The Atkinson Secure Children’s Home is forecasting an overspend of £203,000 due to recruitment and retention issues at the Home having had an adverse impact upon occupancy levels;
- The non-Dedicated Schools Grant (DSG) element of Education and Learning is forecasting an overspend of £2.3m;
- The DSG high needs block, Special Education Needs and Disabilities (SEND) is forecasting a funding shortfall of £18.7m for the current financial year. There have been a further 33 placements since month four within independent special schools, taking the average projection for the year to 568 placements compared to a budgeted level of 430;
- Highways, infrastructure development and waste is forecasting an underspend of £402,000;
- Highways maintenance, network management, street lighting and infrastructure development are forecasting an overspend of £545,000, primarily the result of expected income not being generated until the start of 2020/21;
- Communities, public health, environment and prosperity (COPHEP) are forecasting a small underspend of £4,000;
- Corporate Services are forecasting an overspend of £2.3m;
- Non- service items are forecast to underspend by £9.9m.
The county treasurer’s report says: “The projected overspend has worsened slightly from month four.
:The funding shortfall within the Dedicated School’s Grant SEND high needs block continues to be a significant concern for this year and into the future.
“Like many other local authorities with education responsibilities, the pressures being experienced within the DSG are becoming unmanageable against the current levels of funding and there have been many representations to Government on this issue.”
She said that while the Government has announced an additional £700m in funding for SEND in 2020/21 and DCC will get a £5.5m share, this is almost £3m less than anticipated due to changes to the distribution formula.
She adds: “Given this funding uncertainty and the size of the projected deficit it is suggested that the deficit on SEND is not dealt with at the end of this financial year but held on the balance sheet as a negative reserve.
“This would allow the deficit to be managed across several years and give time for service managers and schools to develop recovery plans.
“This treatment is in line with proposals currently being consulted on which are looking at clarifying the specific grant and ring-fenced status of the Dedicated Schools Grant. It is not a solution, but it is a mechanism that gives more time for a solution to be found.”
DCC’s cabinet will be asked to note the report.