Council's warning over spending as demand for care soars

Blackpool Council overspent by £10m last year, and a report setting out the council’s financial position just three months into the current financial year is already forecasting an overspend of £5.7m for 2023/24.

A report going before the executive on Monday September 11 says Children’s Services is currently forecast to overspend by £5.4m, and Adult Social Care by £2.7m.

Savings in other areas of the budget, including energy costs which are set to be around £3.2m cheaper than expected, will make up some of the shortfall.

£10m was put in to this year’s budget from reserves to help plug some of the spending gaps, while directors are holding fortnightly meetings to monitor the latest situation.

The council’s director of resources Steve Thompson warns in his executive report: “However, in tandem the soaring demand for child protection services and adult social care provision plus the rising costs of providing such care are still creating a burden that current levels of local taxation andGovernment funding struggle to meet.”

He says there has been “unprecedented volatility” in council finances over the last 13 years blamed on nine successive years of government cuts, Covid, leaving the EU and use of outdated funding formulas.

Mr Thompson adds: “This has all conspired to produce a perfect storm of labour and supply shortages, pay demands, excessive inflation, continually rising interest rates in the Bank of England’s attempt to stem the pressure and a central government funding system that is decades out of synchronisation.”

While the number of children in care has reduced to 540 in Blackpool, residential costs have increased by 14 per cent.

Adult services are facing an increased demand for care packages including due to hospital discharges and more complex needs.

Research published in August by the BBC Data Unit showed local authorities across the UK are struggling to balance the books, with the average council now facing a £33m predicted deficit by 2025/26 – a rise of 60 per cent from £20m two years ago.

Blackpool Council has had to make savings of £23m in the current financial year, meaning it is being forced to make the biggest savings per head of population in England of £166 per resident.

In response to the BBC research, a spokesperson for the Department of Levelling Up, Housing and Communities, said councils in England had benefitted from an increase in core spending power of up to £5.1bn in 2023-24 compared to the previous year, with almost £60bn made available for local government overall.

The spokesperson said up to £4.7bn was being made available for the adult social care system in England in 2024/25.

Mr Thompson’s report comes in the week Birmingham City Council effectively declared itself bankrupt, with future spending only available for essential services.

Jonathan Carr-West, chief executive, of local government think tank LGIU, said: “LGIU has been supporting councils for 40 years, but our members tell us that they are experiencing the most acute crisis they can remember.”