By Sam Rkaina, Local Government Reporter / firstname.lastname@example.org
MORE services could be cut at Bristol City Council as it heads towards a £5-million overspend.
The authority is supposed to be making £28 million of cuts from its budget this year, the first in a four-year, £70-million savings plan to deal with the ongoing financial crisis.
But just two months into the current financial year, the council has predicted it will only be able to make £23 million of those cuts – a shortfall of 17 per cent. This is the result of overspends in a number of areas, mainly for providing placements for either children in care or residential health care. It means that if the council cannot balance its budget by the end of the financial year it may have to make cuts in other areas.
The two departments that are overspending are Children and Young People’s Services (CYPS) with £4.2 million and health and social care with £1.9 million.
That total of £6.1 million is offset by £1.3 million of savings being made elsewhere, including £800,000 by introducing a pay freeze and £500,000 from reduced borrowing costs.
CYPS and health and social care are traditionally the two departments that have the largest problem balancing their budgets, because so much of what they do is an essential frontline service.
The council has an ongoing problem with children in care placements. A lack of in-house foster carers means they have to go to the private sector, which costs more and the demand for placements is growing.
Providing residential and nursing placements is also a costly business and the council has warned it will need to make a “significant reduction” in the number if it is going to balance the budget for 2011/12.
Bristol Labour leader Councillor Peter Hammond has raised concerns about the council’s ability to balance the books.
He said: “At a time when the council’s spending plans are supposed to have the brakes on the council is already predicting a final overspend of £4.8 million after only the first two months of this year.
“Only a month ago council press releases were saying how wonderful it was that the Lib Dem administration had underspent their budget last year. Now in adult care a £600,000 saving has turned into a £1.9 million overspend in just a few weeks.
“It makes you wonder who – if anyone – is in control of council finances.”
It is not unusual for local authorities to predict large overspends in the early part of the year, only to solve them by the end.
Last year the council predicted an overspend but finished the year with a £3.1 million overspend.
The big difference now is that the council is, for the first time, having to work with a reducing budget because of the coalition Government’s spending cuts programme.
It means it will have less money every year for the next four years, where as ordinarily the size of the budget would go up.
That will make it more difficult for councils like Bristol to address predicted overspends.
Nevertheless, the council says it’s confident the situation will be resolved.
Speaking at the last cabinet meeting, council leader Barbara Janke said: “This is very early work and I am pleased we are doing it.
“It’s important, now more than ever, that we are as open and transparent as we can be.
“We are aware there are big challenges and officers are looking at how we can get the budget back on track.
“I’m given to understand officers are confident we can. It is encouraging to think that even at this stage the £23 million is on track.”