Middlesbrough councillors discuss forecasted £3.7m overspend and 'putting things in place to bring it down'

Middlesbrough councillors have had their say about a forecast £3.7m overspend.

Councillors had their chance to scrutinise Middlesbrough Council's executive member for finance and governance, Nicky Walker as well as head of financial planning and support Andrew Humble, at a meeting on Wednesday, September 25.

This follows an announcement of a projected overspend of £3.7m for the financial year. Mr Humble explained the report before the Overview and Scruitiny Board (OSB) which had gone to the Executive on September 4, stressing it is based on where the council is “at the moment”.

• READ MORE: Council leaders defend high-earning officers from calls to 'get rid' of them because of overspends

• READ MORE: Council initially forecasting £12m plus overspend on budget set for 2024/25 financial year

He outlined the need to try and get the overspend down and said that further action would be taken to try and achieve this.

Mr Humble told the meeting that the council would have £11.1m in the General Fund, based upon the quarter one forecast, but would prefer this to be closer to £20m - and to stretch this to £30m in the longer term for an "authority of our size". He added: "We’re trying in the medium term plan, build those reserves up because it’s really important”.

He also noted that based on statistics at the end of 2022/23, Middlesbrough Council had the eighth lowest reserves in the country.

Councillor Walker said: “I think the important thing to understand about budget monitoring, is it isn’t just about coming up with a figure. It’s about, especially in quarter one and quarter two, identifying where the problems are and putting things in place in order to bring any overspend down.

“So we’ve got £3.7m, or 2.8% of the budget [as projected overspend], whereas last year, at the same time, it was £11.5m, or 9.2% of the budget.”

She suggested looking closely at the Children's Services department, about which she had asked the mayor for monthly meetings, including stopping children coming into care in the first place, not just “reducing the cost of placements”.

Members of the OSB were then asked for their input, and Lib Dem councillor, Morgan McClintock recalled how Labour Mayor Chris Cooke had said a review was needed on "whether the council needed to do all the things that it always did.”

The Nunthorpe cllr raised delays to the Nunthorpe community hub scheme due to staff capacity issues. “That struck me as something that could be contracted out and as you know, a couple of years ago, we did test the market and discovered that we could do it cheaper by the private sector,” he said.

Councillor Walker added: "It is a good point… we do use externals, but then of course we do get criticised for using external as well. We need to look at that.” She went on to say sometimes it is cheaper to use external support, but sometimes there are other factors that aren’t initially thought of.

Conservative Councillor David Coupe asked if there was an update on the costs of children's services, to which Cllr Walker reiterated two priority points of reducing the cost of placements and stopping children going into care. She also said getting the interim staff replaced with permanent employees "makes Middlesbrough a more attractive place for social workers to come and work”.

Middlesbrough Independent Councillor Association (MICA) Councillor Brian Hubbard asked for a "sneak preview" on quarter two figures, with Mr Humble hinting that the monthly figures were down but added: "Don’t hold me on that.” The second quarter reports will be publicly available after a meeting of the council executive on November 13.

A report previously agreed by members of the council executive said there was a “need to take management action” to control spending. It followed news that the council would no longer be subject to a so-called ‘best value’ notice, with the Government previously requesting evidence of the capacity to transform how it is run “at pace”.

Progress that had been made since the notice - which came with a threat of statutory intervention - was issued in January last year was recognised, although it was noted that “significant financial risks remain”.

For breaking news in your area direct to your inbox every day, go here to sign up to our free newsletter