Council accused of losing control of its budget

Ted Peskett, local democracy reporter

Cardiff Council has been accused of losing control of its budget with the local authority currently predicted to overspend by millions of pounds this year.

Members of Cardiff Council’s policy review and performance scrutiny committee were told by council officials at a meeting on Wednesday, October 9, that there have been huge pressures on a number of council services leading to high levels of spending.

A report that was presented to the scrutiny committee shows there is a projected overspend for this year of £8.8m as at month four of the financial year.

Pressure

The biggest areas of pressure and high projected overspend include children’s services (£5m), education (£4m), and economic development (£1.6m).

A Liberal Democrat member of the council on the scrutiny committee, Cllr Joe Carter, said: “The situation is dire and I suppose the worry for us is that we raise these concerns during the budget process… and yet here we are.

“I am particularly concerned by not just the overspend but actually that the low level of the savings that we agreed back in council that have actually been achieved.

“My question is: was this budget ever achievable?”

In a statement made after the meeting Cllr Carter said the “huge” overspend currently predicted by the council “shows that the council finances are out of control”.

One of the main causes for overspend in children’s services at Cardiff Council is external placements – that is putting children who are under the care of the council in placements out of county.

Support services

Further overspend in this directorate relates to support services for children looked after and shortfalls against savings targets relating to escalating costs in the council’s children with disabilities (CHAD) packages.

In education overspend is largely being driven by the high demand and price pressures in home to school transport.

Cardiff council’s cabinet member for finance, modernisation and performance, Cllr Chris Weaver, said: “It was a realistic budget and it is a realistic budget.

“I think if you look at local authorities across the country you will see that every council is wrestling with challenges in certain areas.

“In particular children’s services, additional learning needs, and home-to-school transport are common themes across local authorities across the country because of the external nature of the factors that are driving those demand-based services.

“It is very difficult for our budgeting process, I accept that, but it’s something that local authorities are wrestling with year after year. But we have faced this before.

“We faced higher overspends, in children’s services in particular, in some years. It is a challenge but it is one that we are absolutely alive to and monitoring and addressing and dealing with.”

Income shortfalls

Income shortfalls from assets like City Hall have partly led to the high levels of projected overspend in economic development.

The building, which used to be hired out for events, is currently closed for maintenance work and it isn’t expected to open again to the public until 2026.

Every year councils across the country have to set a balanced budgets. In recent years, local authorities have struggled with this, seeing demand for services increase and costs continuing to rise.

For the 2024-25 financial year Cardiff Council was left with a £30m budget gap to fill and it had to make savings in a number of service areas.

Prices for things like car parking, sports pitch hire, and school dinners went up and proposals were made to cut some non-statutory services.

Two particularly unpopular proposals that were made this year were plans to reduce street cleansing and remove residential street bins but these did not go ahead in the end.

The council’s head of finance, Ian Allwood, said there are already mitigations being put in place for the three highest areas of overspend.

Projections

Cllr Weaver added: “These are projections for whether we think we will achieve the savings at this point.

“I think all of those where we think we will only partially or not achieve those savings there will be challenges for directors around either achieving that saving or finding an alternative solution to mitigate that overspend.”

He later went on to say: “All of these savings will be examined to see how quickly they can be achieved.”