Hertfordshire County Council welcomes ‘only £2m’ overspend as school bill soars

Hertfordshire County Council’s Conservatives bosses are relieved to have racked up only a £2m overspend in the last financial year.

The authority budgeted to spend £1.1 billion on education, social care, highways, public health, fire and rescue and other services in 2023-24.

According to a report presented to the latest meeting of the cabinet, the council ended the year to the end of March with a £2m deficit – despite £10m already set aside as a contingency. At one point, halfway through the year, an overspend of £15.7m had been forecast.

The department with the largest overspend was children’s services, with £17.1m – including a £7.5m overspend in schools which is set to be more than double that this year.

Cllr Bob Deering, HCC’s executive member for resources and performance, who is also the Tory group leader on East Herts Council, told councillors that to all intents and purposes they had delivered a “balanced budget”.

He said to have overspent by “only £2m” – which he stressed was about 0.2% of the overall budget – was a “very, very good outcome”. He said council officers delivered 97% of the council’s savings target of £28m.

The leader, Cllr Richard Roberts, said they should not underestimate how hard last year was, pointing to the impact of inflation and energy costs. He said it had been a “challenging year” and that coming within £2m of a balanced budget was “excellent”.

At the meeting, it was reported to councillors that service costs had escalated due to increased demand, the complexity of need and the impact of inflation.

Actions taken to “mitigate” costs included the “recruitment prioritisation” – freezing recruitment to all but essential roles – and the “children’s action plan”.

But councillors heard there had been under-spends in non-social care departments, including waste management and back-office support services.

The department with the largest overspend – £17.1m – was children’s services. Community protection recorded an overspend of £900,000 and adult care services £800,000.

Cllr Roberts highlighted the financial pressures on children’s services, including a £7.5m overspend in schools.

“We took the view that we were going to put children first and money second,” he said. “We virtually had no option. We couldn’t hold the budget any longer.

“There’s not enough money going into the high needs block as part of the schools funding that comes from the Government and we cannot hold it back.

“Like many upper-tier authorities managing this budget with and for schools and schoolchildren, there’s not enough money in it.

“So last year that budget overspent by £7.5m. And I think this year we’re looking at something like £17m overspending in that area.

“It is unsustainable. Parents and children need to be reassured that there is funding and support available for children with special educational needs in schools as well as all of the other provision that we provide.

“That is one of the big challenges, I think, for us and by inference our relationship with the Government on this issue.”

At the meeting, councillors agreed to reprogramme £33.9m of capital funding from 2023-24.

Despite the excess, Cllr Deering told the cabinet the council had achieved “the biggest capital programme we have ever done – to the order of £280m”.

Looking ahead, the report presented to the cabinet said: “There are real concerns that 2024-25 will be another challenging year financially.

“As part of the budget preparation, £98m was invested in service budgets to address some of these concerns, but early forecasts suggest demand and average costs will continue to escalate without additional demand management interventions.”