Cash-strapped Stoke-on-Trent City Council is on course for an £11 million overspend this year. The authority's latest financial performance report shows 'emerging risks' of £12.9 million, as of the end of June – mostly relating to children and family services.

Budget management has brought these pressures down to £11 million, but the report says that further work will be needed to plug the eight-figure financial gap. The city council recorded a £10.5 million overspend last year, which had to be funded out of the 'exceptional financial support' package previously agreed with the government.

According to the quarter one finance report, the council is continuing to face the impact of recent high inflation, and increasing demand for care services. Measures being undertaken to reduce the overspend include a continuing freeze on 'non-essential' spending, and tighter controls on recruitment and agency use.

Cabinet members will be given an update on the council's financial update when they meet today. The report to cabinet states: "The city council along with the rest of the local government sector continues to experience significant financial pressures including the continued impact of recent high inflation on the council's pay bill and the cost of goods and services, as well as continuing increased demand for essential services such as care for the elderly and placements for children in care.

"A programme of work to develop immediate mitigations and options to address the financial gap in both in 2024/25 and in 2025/26 is in progress and will be undertaken at pace."

The authority's latest financial performance report shows 'emerging risks' of £12.9 million (Nub News).

Children and family services at the council are forecasting a £7.1 million overspend, of which £3.2 million relates to children's placements. The council had 1,148 children in care at the end of June, which is the highest number relative to population of any authority in England.

Due to the high number of looked-after children, the council has to spend a large amount on costly independent sector placements.

The report states: "This budget pressure can only be addressed by finding alternatives to care orders, moving children in the care system in to permanence as quickly as possible, and ensuring that children are in sustainable and stable long term placements. It is vital that significant progress is made in the current financial year to enable the council to set a realistic budget in 2025/26.

"Mitigations against this financial pressure continue to be sought; including further improvements to processes and scrutiny of partnership funding opportunities. Placement sufficiency and the continuing rise in placement costs (specifically independent placements) are extremely challenging, but are in line with a national trend."

The council is also forecasting a £2.1 million overspend in the adult social care, health integration and wellbeing directorate. This overspend relates to increasing demand for social care placements and older persons nursing care, reflecting a national trend.

Planned actions include a review of the Better Care Fund to 'maximise' financial contributions from the NHS, and a review of provider services to ensure value for money.

Councillor Alastair Watson, cabinet member for finance and corporate services, said: "Our work to address the financial situation is well under way. However, we still face significant costs, challenges and legacy issues to contend with.

"It is no secret that the financial challenges remain high, especially within social care services.

"The council has a robust improvement and productivity plan, the impact of which will continue to become more evident in future months and years as work takes effect. But what we do know is that we are already seeing some signs of improvement, for example a small reduction in the number of children going into care and our overspend forecast for children and adult services has slightly reduced."

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READ MORE: Plans to transform vacant Stoke-on-Trent school into accommodation for vulnerable adults refused

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