Council calls for government action as it forecasts £12m overspend

Coventry Council House. Credit: Google Earth

Coventry City Council has announced it expects to overspend by £12.1m, after facing significant financial pressures.

Social care costs have spiralled with Cllr Richard Brown, cabinet member for finance, revealing it now spends almost 70% on social care, in comparison to 40% in 2011. Adults and Children’s social care together account for nearly £11m of the underlying overspend. He blames the rising costs of external companies due to inflation and calls for the government to step in.

Cllr Brown also says the Local Government Association has forecast that local authorities need an additional £3bn “to just stand still over the next two years” whilst the Minister for Levelling Up, Housing and Communities has chosen to give back £1.9bn to the Treasury department.

The news follows on from an overspend of £6.7m in 2022/23, a shortfall which had to be covered through a contribution from the Council’s reserves.

Cllr Richard Brown, Cabinet Member for Finance said that Coventry City Council said: “Councils from Kent to Leeds and Bradford to Shropshire, are having to rethink their policies and reconsider which services are no longer affordable.”

“These challenges are not going away as we have seen in the many underlying challenges around rising costs in living that we are all facing at present.

“I am planning to write to the government to request that they step in, otherwise more and more councils will find that they are simply unable to balance their budget.

“We expect to have a budget gap of £12.1m at the end of 2023/24 but the underlying position is significantly higher than in previous years. We will need to take further action, or it will become unmanageable in the future.

“If the Government doesn’t take action, then councils like us, who have so far managed to cope with the financial challenge, will be facing a situation where we have to take a hard look at some of the services that local people value and decide whether they can continue to provide them.

“Quite frankly, given the size of this gap in our budget, we are rapidly running out of options on where savings can be made unless something radically changes.

“I am already having some difficult conversations with my Cabinet colleagues to discuss the steps that we may need to take to balance our budget both this year and in years to come”.

The Council’s Quarter 1 Finance Report will be discussed at Cabinet on Tuesday 29 August.