£2.2m projected overspend prompts council spending freeze

Bruce Sinclair, Local Democracy Reporter

A moratorium on all of a council’s non-essential expenditure has again been enacted after councillors heard the authority is predicted to overspend its budget by more than £2m this year.

A report before members of Pembrokeshire County Council’s Cabinet meeting on 7 September said that, as of the first financial quarter of the year, the council was predicting an overspend of £2.2m on its annual budget.

The report, presented by Cabinet Member for Corporate Finance and Efficiencies, Cllr Jon Harvey, said the approved budget of £347.4m was expected to be exceeded to the tune of £349.6m, based on the first quarter of the financial year figures.

Cllr Harvey outlined some of the financial pressures to fellow Cabinet members, with School Additional Learning Needs (ALN) projected to have a £1.166m overspend, as well as a £0.6m overspend pressure on School and College transport in part due to increased fuel costs, an HMRC approved mileage allowance payment for cars and vans from 45p to 55p per mile backdated to April also accounting for a £0.6m pressure.

Cllr Harvey’s presented report said that, on the ALN pressures, there may be support from Welsh Government but that figure was, as yet, unknown.

“We anticipate that specific funding for ALN will be forthcoming from Welsh Government during 2026-27 to address this. The Welsh Government’s proposed First Supplementary Budget included an additional £40m for school ALN pressures in 2026-27, plus £40m in each of the following two financial years, but the allocation in 2026-27 was insufficient to get the budget approved and it was voted down.

“Whilst it is understood that ALN funding will remain a key consideration in any revised Supplementary Budget, no additional funding can be assumed until revised proposals are published and approved by the Senedd, which could be when the Welsh Government draft budget for 2027-28 is considered on 17 November 2026.

“As the level of this ALN funding is currently unknown no amount has been included in the Q1 projections.”

Cllr Harvey, in moving the report, also moved a moratorium on all non-essential expenditure, which has not been enacted during recent underspends, but was a common feature earlier in the 2020s during a time of warnings of repeated overspends of the council budget.

Following concerns raised by Cabinet members Director of Resources Jon Haswell stressed the first financial quarter often contained the bleakest projection, with hopes ALN grants, if forthcoming, could help address the situation.

Chief Executive Will Bramble said it was “encouraging that, other than a few specific areas, the vast majority of our services are down to come in under budget.”

Members agreed to note the report and for the moratorium to be enacted.

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