North Northamptonshire Council (NNC) has warned residents it is facing a major overspend on its budget. The council said increased pressures from demand-led services are driving up costs.
NNC estimated a total overspend of £12.9m for 2023-24 in an executive meeting on Thursday, October 12. The majority of the overspend has come from the children’s sector, which is projected to go £10m over budget.
Councillor Lloyd Bunday, executive member for finance and transformation, said at the meeting: “The biggest risk to this council is the challenge of our demand-led services. Although this issue is being reported by many councils around the country this should not be an excuse to hide behind.”
Cllr Bunday said the main pressure relates to the costs from Northamptonshire Children’s Trust (NCT). Despite meeting with NCT to agree a contract sum of £150m for the year, an increase of £22m from the previous budget, the Trust is still projecting a £23m overspend on top of this.
As the NCT is a joint service across West and North Northants, NNC must cover £10m for their share. Cllr Bunday added: “If these pressures are not mitigated this will pose a significant financial risk to the council. The Trust is looking at potential mitigations, however, there is a risk that this position could worsen before year-end.”
He also said that the NCT is forecasting that £4.1m in efficiency savings are at risk of not being delivered, which could increase the overall spend of the service to being £27m over budget.
Another area for concern is the Dedicated Schools Grant (DSG) which is forecasting an overspend of £4.9m due to rising pressures and demand in the higher needs education block, which supports provision for children with special educational needs and disabilities (SEND).
As much as £700,000 of reserve funds have already been used to try to mitigate some of the costs. Other services that have estimated overspends are the housing revenue account for £15k and a £2.2m in adult social services.
There was a 15 per cent increase in demand from younger adults for services, and a 25 per cent demand increase in adults aged 65+, which Councillor Helen Harrison, the executive member for adults, health and wellbeing, said was “absolutely unprecedented”.
Cllr Harrison said: “It’s not going to be something that’s very easy to deal with, but we must understand it so that we know what the next few years are going to look like.”
North Northamptonshire Council’s contingency budget is £3.7m, which the council has said it is assumed that it will be used fully during the year.