Big overspend sparks fresh cash warning

But Steve Thompson, director of resources at Blackpool Council, said despite the pressure on budgets he believed Blackpool Council would be able to weather the storm.

Children’s services is currently forecast to overspend by £2.7m, while delays in demolishing the Syndicate have cost the council £300,000.

Earmarked reserves – the cash set aside to cushion budgets which overspend – are forecast to diminish by £5m to £40m by the end of this financial year which includes £2m towards redundancy costs and pensions.

Mr Thompson told a meeting of the tourism, economy and resources scrutiny committee: “Although the number of looked after children has stabilised, the cost on average has increased by 50 per cent.

“The market is responding and exploiting the situation and it is something we are looking at.

“We have the conflict between balancing finances and delivering safe care of children and adults.”

Mr Thompson added the council’s financial track record and the monitoring it had in place will “see us through but it is going to be a very difficult four years, and indeed two years.”

But Coun Maxine Callow said she found the situation extremely worrying and questioned some projects, including the opening of the Gateway gym in the Talbot Gateway, where money had been spent.

She said: “Our children should take priority and we should ensure they are safe but if we have this overspending year after year, where is it going to end and how are we going to pay for it?

“Why did we think we could run a gym – and then when it closes, that is £96,000 we have lost, and the Syndicate has lost £300,000.

“If someone was reading this they would think we had been very careless as a council.

“We are trying to count the pennies as a council but there appears to have been a number of costly mistakes.”

Mr Thompson said although £96,000 was a substantial amount in relation to the Gateway gym, the investment had demonstrated such a project could work in that area.

He added: “The proposal was made to give up our public sector gym and retrench to Stanley Park and give the private sector the opportunity to come in.

“It was an investment to prove the model works and for the private sector to then come in and take over.”

He said the overspend on the Syndicate would be clawed back from next year’s capital programme. The council is currently facing a further £5m of cuts from its budget for next year, on top of £20m of cuts already announced.