Council ‘unlikely’ to declare bankruptcy despite predicting £16m budget deficit

The council said the bulk of ‘overspending’ is in adult and children’s social care, reports Josh Mellor, Local Democracy Reporter

Credit: LDRS

Waltham Forest Council’s end-of-year budget is predicted to be £16million in the red. The budget deficit prediction comes less than halfway through the financial year.

According to a budget update this week a number of council services – such as adult social care, children’s social care and special educational needs – are facing budget “pressures”.

The update, which reaches up to July this year, tracks whether the council’s spending on day-to-day services is in line with the budget plan agreed by councillors in March.

It concludes that although the council faces financial pressures, it is “unlikely” to have to declare itself effectively bankrupt through a Section 114 notice, as Birmingham City Council did this month.

Cabinet member for finance and resources Paul Douglas said that while it was “obviously” a “very challenging situation to be in”, it is a challenge that is being faced “countrywide”.

“The bulk of that [overspending] is in adult social care and children’s social care. We are taking this very seriously and working on a number of measures to balance the budget by the end of the year.

Cllr Douglas recognised “challenges ahead” for the council which he put down to higher than predicted inflation, but maintained that the council “was equal to those challenges”.

A breakdown of the costs says both the demand and price of providing care for elderly and working-age adults have increased more than hoped, pushing end-of-year spending £7m over the £63m target.

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Since April this year the number of adults with care placements and packages – most of which are for community-based care rather than care homes – has grown by 209 to a total of about 3,450.

Waltham Forest is expecting to spend £4.5m more than planned on children’s social care due to the cost of staff and residential placements increasing.

In total, there were about 650 Waltham Forest children with residential placements and about 340 looked after children.

The council is also expecting a future increase in demand for its homelessness and housing support services, which currently cost about £9.5m per year.

The report said: “The overarching strategy to mitigate future demand increases is to accelerate the council’s acquisition programmes and provide a ready supply of housing to support households to exit [temporary accommodation].”

In an effort to reduce its budget, Waltham Forest made cuts and savings worth £6.7m earlier this year.

These included saving £1m through “reviews” of social care and mental health costs, spending £500,000 less on adult social care equipment and making extra money from fines, parking permits and commercial rents.

According to the budget update, about three quarters of these are “on track or already delivered” and £1.4m is “at risk of non-delivery or delayed”.

The council’s full budget report is available to read here

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