Earlier this week, Bridgend Council’s Corporate Overview and Scrutiny Committee discussed a recent budget monitoring report (pdf).
The report revealed that Bridgend Council is projected to to overspend by £9.73million as of the first quarter of the 2023-24 financial year.
While in-year variations are common, the size of the projected overspend is unusual.
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Why has it happened?
The main pressures are coming from school transport and the social services department.
School transport has a persistent overspend of around £1.3million a year. Attempts at renegotiating contracts have been unsuccessful due to “unfavourable market conditions”, with quotes often coming back at a higher rate than they currently are.
There are other pressures relating to catering services and charges for out-of-county placements. The report also says that 44.1% of schools (including both of the county’s special schools) are projecting budget deficits by the end of the financial year.
The biggest single pressure is in social services which is projecting an £11million overspend.
There are longstanding issues arising from various high-profile service failures, increased numbers of independent residential placements for children (often very expensive), as well as increasing demand for learning disability services and residential care for the elderly.
Councillors request better information on spending trends
Committee Chair, Cllr. Alex Williams (Ind, Pencoed & Penprysg), wanted to know why a budget was put before councillors earlier this year which failed to meet the requirements of different departments.
He also noted that social services across Wales were proportionally underfunded as more funds are redirected towards the NHS by the Welsh Government.
Cllr. Simon Griffiths (Lab, Brackla East & Coychurch) was critical of the levels of information provided on spending trends; it wasn’t clear what the worse and best-case scenarios were.
Cllr. Griffiths called for directorates to be properly challenged on spending decisions from the outside, even suggesting a recruitment freeze for positions deemed to be non-essential.
Cllr. Heidi Bennett (Lab, Penyfai) enquired about the financial position of other councils.
Cllr. Amanda Williams (Ind, Coity Higher) was disappointed opposition councillors were told not to propose the use of reserved when drafting alternative budget plans. Now the report suggested the use of reserves to cover shortfalls. What risks did that present?
Bridgend not alone in projected overspends; BCBC needs to prioritise what it can and can no longer do
Explaining the figures BCBC’s Financial Officer, Carys Lord, said there were issues with inflation (particularly fuel and energy costs), while the council projected a peak in demand for social services when in fact demand continues to increase.
As for reserves, they are often used to fund capital projects and it’s not a good idea to use them to cover day-to-day (revenue) spending. £3million has been found in reserves that were originally due to be spent on different things.
Chief Executive, Mark Shephard, noted a 47% increase in demand for children’s services this year alone. On other councils, he namechecked Wrexham, Cardiff and Swansea as all projecting first-quarter overspends.
The council now needed to prioritise and won’t be able to do as much.
Deputy Leader and Cabinet Member for Social Services, Cllr. Jane Gebbie (Lab, Pyle, Kenfig Hill & Cefn Cribwr) made the point that “savings” means “cuts” to frontline services which are taking longer to deliver. That’s become the only way to manage finances and Bridgend isn’t alone in this.
