Council leader's 'magic money tree' warning as authority faces 'significant' overspend

St Helens Council is predicting a "significant" overspend due to major financial pressures, with the leader cautioning that there isn't a "magic money tree". The financial monitoring report for the second period of 2024-25 was presented to the cabinet at its meeting last week.

This report outlined the projected financial situation in relation to the revenue and capital budget for 2024-25, summarised the council's reserves and balances position, and included the interim treasury management strategy report. It highlighted that the failure to deliver agreed savings poses a "key risk" to the council.

The report forecasts an overspend of £8.910 million against the updated net portfolio budget of £185.838 million. "There was a similar portfolio overspend in both 2022-23 and 2023-24, making 2024-25 the third consecutive year in which the council is forecasting a significant overspend," it stated.

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One-off corporate underspends are predicted to offset the portfolio overspend by £3.410m, resulting in a forecast net budget overspend of £5.500m for 2024-25. "This presents a significant financial risk to the council. There is an urgent requirement for mitigating actions to be implemented by management to minimise this risk. The main pressure is within children & young people, the main drivers of this being increasing demand, social work staffing challenges and unachieved savings. The pressure in the transport & environment portfolio is primarily as a result of the unsu The recycling contract's successful retendering was discussed. "The other main pressure is within integrated health & care, reflecting ongoing demand pressures and the complexity of service users' needs.

"If the forecast overspend is not reduced, 2024-25 will be the third consecutive year in which the council has significantly overspent, requiring further unplanned use of reserves. It is vital for the council's financial sustainability that it is able to control its costs and operate within its approved budgets," was stated. The cabinet noted the "severe forecast outturn revenue overspend position" for 2024-25, acknowledged the latest position regarding the implementation of 2024-25 budget savings and those "brought forward from prior years", approved the revised capital programme, and noted and approved the latest "reserves and balances position".

During the meeting, council leader Cllr Anthony Burns pointed out that the new Labour Government is "only a few months in", adding "everyone expected a magic money tree, but this document shows that there isn't one". Moreover, Cllr Burns said: "I was asked before about what the difference, it will be, having a Labour Government, to us as an authority, will it be trickier because it's our party in power, and I said absolutely not, because we've got a Government that's listening to us and that we can lobby."