Hertfordshire County Council heading for £24.4m budget overspend by end of 2024-25

Hertfordshire County Council (HCC) is heading for an overspend of almost £25 million, according to the latest figures.

At the start of the 2024-25 financial year, which ends on March 31, the authority allocated a £1.1 billion-plus revenue budget to operate its adult and children’s social care, highways, public health, trading standards and fire and rescue services.

However, the latest budget monitoring report – based on figures at the end of December – indicates an expected overspend of £24.4m.

The data was published before a meeting on Friday (Feb 14) of the council’s resources and performance cabinet panel, where councillors were being presented with proposals that could see funding reprogrammed from capital budgets.

According to the report, a £20m contingency budget will reduce the projected overspend to £4.4m. If £6.6m is reprogrammed from capital budgets, that would result in a forecast underspend of £2.2m.

A final decision will be taken by a meeting of the cabinet on February 24.

“Like many councils across the country, we are facing significant increases in demand and complexity of need across social care services,” says the report.

“Whilst we are not in the same position as some other councils, who have declared financial distress and are receiving exceptional Government support, we do need to take proactive steps to maintain our position and reputation as a responsible and well-run organisation with strong financial management.”

The forecast overspend was not “the result of poor governance or financial mismanagement”, said the report.

“Instead, we, like other local authorities, are continuing to see the impact of factors such as increased demand, complexity of need and higher than estimated increases in costs of externally commissioned care.”

The council had previously predicted an overspend of £20.1m, based on budget data from the end of September. However, since then, there has been further demand and pressure on social care for adults and children.

The report highlights £10m in-year savings by the county council which are said to have been “critical in maintaining control over the in-year financial position” – in addition to £41m savings included in the initial budget plan.

The budget monitor report says that the £778m schools budget is expected to record a £13.1m overspend by the end of the 2024-25.

That is said to be driven by a £15m pressure within high-needs funding, which is used to support children with special educational needs and disabilities (SEND).