Stoke-on-Trent City Council has revealed it has an £8.5 million gap in its budget for the year.
The council, which has been run by Labour since local elections in May, says it is lobbying the Government for immediate help – warning that without a funding overhaul it won’t be able to sustain services next year.
The overspend crisis could have a direct impact on a number of city council jobs too.
The council has announced the funding gap in a report on its 2023/24 first quarter financial performance, prepared ahead of a cabinet meeting next week.
It is warning that without a reduction in demand for care services and a rapid decrease in inflation, or significant direct support from government, it will not be able to sustain services.
It indicates that the main pressures on the budget position are:
- Continuing record numbers of children in care – currently at 1,121 children, and with high costs of placements. Forecast pressures to support children’s social care are currently £9.1m.
- Increased demand for adult social care, with high unit costs of placements particularly in working age adults, residential and nursing, and home care. Forecast pressures to support adult social care are currently £5.2m.
- At a national level, a proposed pay offer by National Employers that would result in an estimated £1.1m in-year budget pressure, if accepted by trade unions.
Councillor Alastair Watson, cabinet member for finance and corporate services, said: “Since coming into office in May we’ve been scrutinising all spend by the council and it’s become very clear that we’ve inherited a very perilous financial situation.
“We’ve hit the ground running in these four months… but we’ve done this while insisting on tight spending controls in response to the financial position we’ve inherited. So far, we’ve reduced a potential £13m budget gap down to £8.5m.
“But as it stands, with record numbers of children in care, with high inflation that increases the unit cost of care for children and adults along with the cost of so many goods and services that we purchase for the benefit of residents, we are spending more money than we can afford – we cannot sustain services like this.
“We’re calling on government to listen to our situation – we are not reckless with public money, we spend wisely for the benefit of local people.
“If we cannot afford to provide the services we deliver in these circumstances, then the system is broken, not local government. We’re lobbying government for immediate action to help stem this tide.”
Stoke-on-Trent City Council also revealed that it has delivered £250m in savings over the past 10 years, with its real-terms spending power reduced by 26.9% since 2010.
The announcement comes as a number of authorities across the country have issued calls to government to redress the imbalance in the funding of social care as well as national warnings that up to 26 councils could be faced with issuing Section 114 notices in the next two years.
Such notices are issued when councils cannot balance their books. The notices restrict all new spending with the exception of protecting vulnerable people and statutory services and pre-existing commitments.
