City council leaders have revealed that a budget gap of £8.5m will leave the authority at significant risk of not being able to set a balanced budget next year.

Stoke-on-Trent City Council has announced the funding gap in a report on the authority's first quarter financial performance.

The authority is warning that without a reduction in demand for care services and a rapid decrease in inflation, or significant direct support from government, it will not be able to sustain services.

The main pressures on the council's budget position are:

• Continuing record numbers of children in care – currently at 1,121 children, and with high costs of placements. Forecast pressures to support children's social care are currently £9.1m.
• Increased demand for adult social care, with high unit costs of placements particularly in working age adults, residential and nursing, and home care. Forecast pressures to support adult social care are currently £5.2m.
• At a national level, a proposed pay offer by National Employers that would result in an estimated £1.1m in-year budget pressure, if accepted by trade unions.

The authority is warning that it will not be able to sustain services without government help (Nub News).

Councillor Alastair Watson, cabinet member for finance and corporate services, said: "Since coming into office in May we've been scrutinising all spend by the council and it's become very clear that we've inherited a very perilous financial situation.

"We've hit the ground running in these four months – getting on top of illegal dumping and clearing a longstanding fly-tipping backlog that's been plaguing residents; prioritising early intervention and prevention services such as a new family hub model to provide better, more sustained social care; delivering a five-year investment programme into council housing; and tackling anti-social behaviour in our communities.

"We've done this while insisting on tight spending controls in response to the financial position we've inherited. So far, we've reduced a potential £13m budget gap down to £8.5m.

"But as it stands, with record numbers of children in care, with high inflation that increases the unit cost of care for children and adults along with the cost of so many goods and services that we purchase for the benefit of residents, we are spending more money than we can afford – we cannot sustain services like this.

"We're calling on government to listen to our situation – we are not reckless with public money, we spend wisely for the benefit of local people. If we cannot afford to provide the services we deliver in these circumstances, then the system is broken, not local government. We're lobbying government for immediate action to help stem this tide."

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