Bosses at Warwickshire County Council have been asked to produce an action plan to address multi-million pound spending pressures.
The county’s council’s cabinet – the team of Conservative councillors in charge of major service areas – was presented with a report that highlighted how growing demand for social care services for adults and children is driving up costs.
The authority currently expects to spend more than £26 million more than initially budgeted on social care and support and children and families in the financial year 2023-24.
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Council budgets are made up of many moving parts and as part of Warwickshire’s plan to balance the books this year, it earmarked more than £15 million worth of savings.
Current projections show it is on target to achieve only £6.3 million of those with £7.45 million worth unlikely to come forward in the social care and support and children and families areas.
Within the £26 million, £5.8 million more is expected to be required to fulfil the council’s obligation to find care placements – in its own homes or in private provision – for children that need to be looked after, including “high-cost, wrap-around extra care packages” that can cost up to £30,000 per week for one child.
Such placements have been on the council’s agenda for some time with extra capacity being built within the county’s own provision to bring down costs in the long term, although this is adding an extra £1.178 million pressure this year in pre and post-opening costs. There is also a £4.2 million projected overspend on staff to help deal with rising demand.
Older people’s services are set to require another £9.7 million due to the level of needs some service users have and the volume of demand coming forward.
Overall, the council’s service areas are expected to spend £35.8 million more than planned this year, and while bigger-than-expected government grants and capital savings help to cover off all bar £883,000 this year, deputy leader and portfolio holder for finance Councillor Peter Butlin (Con, Admirals & Cawston) admitted there was a lot of work to do to head off long-term problems.
He highlighted a new £2.6 million gap in High Needs Block funding for education “mainly due to increased demand for SEND (special educational needs and disabilities provision) across a range of areas” and a £2.8 million shortfall in funding for home-to-school transport.
“Home-to-school transport has already been recognised as a problem for us and we have a cross-party budget working group that is trying to identify ways of trying to hold down that budget but there is still increased demand," he said.
There is also an added pressure of £1.65 million on energy costs.
Cllr Butlin explained: “We have been in an advantageous position over the past two years when the price was going up because we had forward bought and the prices held.
“Unfortunately, we have now come to the end of those contracts and new prices are having an impact on our budgets so we are going to see an increase, particularly with gas.
“I have had further discussions with our suppliers and they are saying they are managing to forward buy gas so, while we will see a small spike over these next 12 months, hopefully things will settle back down again and we will see reduced energy costs later on.
"That is the only bright spot that I can report at the moment.”
On the overall picture, Cllr Butlin later warned: “If this is a trend that takes place across the next five years of our medium term financial strategy, we are going to have to make some tough decisions.”
However, he concluded that the “precautionary note” would inform the work that directors and senior managers at the county must do to highlight potential savings, adding that the council always “plans for the worst and hopes for the best”.
Leader Councillor Izzi Seccombe OBE (Con, Stour and the Vale) added: “This is the first quarter report and at this time of year there is always a degree of variance.
“We know where are going with it and as much as anything else, this is a shared understanding of the position we are in and how we as a cabinet team and corporate board leadership team can work together to resolve the problems.
“We have many months ahead of us to do that. It is always quite a way apart at this point in time but the underlying issue is the awareness for us as a leadership team – and I talk about that in the broadest sense – that this is a corporate responsibility.
“It is not individual to departments, it never will be, and we work at this together as we always have done.
"The main thing for me is that awareness.”