County council chiefs in Hertfordshire are seeking to make £14m of additional savings, as the latest estimates predict an overspend in excess of £20m by the end of the 2024/25 financial year.
In Hertfordshire, the county council is responsible for a range of services that include adult care, highways, children’s services, and public health, as well as services such as trading standards and the Fire and Rescue Service.
To provide these services throughout 2024/25, the council has set a budget of just over £1.1bn.
However, the latest data shows that by the end of June – just three months into the new 2024/25 financial year – the council had already spent £4.6m more than expected at that point in the year.
Increasing costs of materials, high energy prices, and increased demand for council services are all said to have had an impact.
Without action, council officers predict that by the end of the financial year, the overspend could reach £20.9m, which is £0.9m in excess of the council’s £20m contingency fund.
On Thursday (October 3), the “challenging financial position” will be reported to a meeting of the council’s resources and performance cabinet panel.
Councillors will be told about ongoing work to “mitigate pressures” and to “identify offsetting savings” across the council, in a bid to make £14m of savings.
According to an officers’ report published in advance of the meeting, council departments forecasting overspends are being asked to identify actions to mitigate the pressures where possible, in a bid to cut spending by £6.6m.
Where they can’t, they will be asked to take other actions to “offset pressures”.
Meanwhile, all council departments have been asked to reduce ‘non-pay’ costs where possible, in a bid to save a further £5.4m – equivalent to a 30 per cent spend reduction in areas such as printing, consultancy, mileage, and training.
“Proactive action plans totalling £14m are being formulated by all departments to mitigate pressures and identify offsetting savings,” says the officers’ report.
“The delivery of these challenging plans during the year is critical to manage the financial position.”
At the meeting, it will be reported that the most significant financial pressures facing the council relate to the provision of services for ‘looked after’ children and ‘supported living services’.
Councillors will hear that there are “significant” underlying financial risks that could potentially worsen the financial position.
Those risks are said to include national pay negotiations and the continuing escalation of demand for social care, as well as concerns that £46m of savings already planned may not be delivered.
Nevertheless, speaking in advance of the meeting, the leader of the county council, Cllr Richard Roberts, has suggested that the council is “well placed” to bring down the overspend.
“Like all local authorities, we are again seeing pressures on our budget in-year due to a range of external factors,” said Cllr Roberts.
“But thanks to our prudent financial planning, I believe we are well placed to bring down this overspend to ensure that we can meet the challenges that are just over the horizon.
“By ensuring earlier in the year that additional funding was available, we will be able to continue to support the most vulnerable while driving down our own costs, making ourselves as efficient as possible so that every penny we spend is done to the betterment of Hertfordshire.”
According to the officers’ report, the levels of overspend being reported after just three months of 2024/25 are “unprecedented”.
As part of the budget-setting process for 2024/25, the county council chose to increase its annual contingency from £10m to £20m.
However, according to the report, the aim at the start of the year was to minimise the use of the second £10m, if possible.
The cost-cutting “action plans” now aim to reduce the projected overspend so that it is below the original contingency sum of £10m.
“Considering the level of prevailing risk, and the expected difficulty in achieving these cost savings in-year, a decision was made to target an overspend lower than the £10m contingency level to build capacity for non-delivery or a worsening in unavoidable service pressures,” says the report.
“Detailed action plans for each department will be developed and monitored for the rest of the financial year.”
Deborah is a Local Democracy Reporter covering news across Hertfordshire, with a strong focus on councils, local government and public policy. Her reporting includes county council decisions, council tax, spending pressures, legal and regulatory issues, healthcare stories including junior doctors, and community projects affecting local residents.
