Middlesbrough Council expected overspend down by more than 60% compared to three months ago

Middlesbrough Council’s most recent financial forecast shows that the authority's expected overspend has decreased by over 60%.

The council’s latest 2024/25 forecast outturn, which measured the situation at the end of the year’s second quarter, is an overspend of £1.4m, down from £3.7m, which was the expectation three months ago. A report to be examined by Middlesbrough Council Executive has confirmed that there is an improving financial picture, but there is more work to be done between now and March 31, 2025 - the end of the financial year.

The report explains that “there is a need to take further management action in consultation with Executive Members to control expenditure within the approved budget of £143.190m.” The current prediction of a £1.382m overspend equates to 0.97% of the approved budget.

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The report clarifies that “the forecast year-end overspend of £1.382m currently includes £2.481m of net savings where there is a high risk that they will not be deliverable in 2024/25, which are offset by £1.099m of operational underspends”. If these savings cannot be achieved, the report confirms that a proportion of the pre-agreed £3.5m Exceptional Financial Support would be used to cover such unachieved savings.

While there is potential for the situation to worsen, there is also potential for further improvement, with the Financial Recovery Plan savings that have been identified. These potential savings, if fully delivered, could reduce the forecast overspend by £498,000, meaning the overspend would be £884,000.

If there is a zero overspend and zero underspend at the end of the financial year, the council will still be drawing upon £4.7m that is Exceptional Financial Support from the government, previously agreed to enable the setting of a balanced budget earlier this year. “Any underspend against the approved budget will reduce the Council’s need to draw down Exceptional Financial Support”, the report explains.

Middlesbrough Council have confirmed that budget proposals for 2025/26 do not rely on any government support, and that the proposed budget sets out a balanced position for the next two years, as it awaits to go through the various stages of consultation and approval.

Speaking to the Local Democracy Reporting Service, Mayor Chris Cooke confirmed it was his “expectation” to get the forecast overspend down to zero by the end of the financial year, while executive member for finance Councillor Nicky Walker described it as her “aim”.

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