North Northamptonshire Council warns of £11m overspend

North Northamptonshire Council is predicting an overspend of more than £10m coming in against their £339m budget for 2023/24.

The main pressure relates to the Children’s Trust which is currently forecasting an overspend of £30.902m for this financial year, with North Northants having to pick up £13.6m of the costs. The remainder is to be paid by its counterpart, West Northamptonshire Council.

The large bill, in part, is due to the high costs and demand for placements for children in care which has incurred costs £24m over its budget. Council documents say this sector will continue to remain under pressure and that it is “extremely volatile both locally and nationally”.

A large chunk of the authority’s overspend also comes from third-party payments to independent residential and nursing homes, at £12.8m. Client numbers have increased since April 2022 by 25 per cent in the 65+ cohort and 15 per cent in the 18-64 cohort which has been called “unprecedented”.

Cllr Lloyd Bunday (Con), executive member for finance and transformation, said: “We recognise that it is and will continue to be a challenging time, but we will be working hard to balance our finances while maintaining vital services.

“Everybody accepts that the biggest risk to this council is the demand-led services and, unfortunately, we have a finite amount of money that we can spend and finite resources and I think we’ve got to work on that and encourage the Children’s Trust to work on that as well.

“It is worrying - it’s got to be mitigated and it’s got to be delivered.”

The overall projected position for the general fund is a net overspend of £11.036 million, made up of a £27m overspend in services and £16m clawed back in savings across the council budgets and money coming in from business rates income.

The Dedicated Schools Grant, which is a separate ringfenced account allocated to education services and facilities, has also been highlighted as an area of concern bringing further cost pressures of £9.1m to the council. Most of this comes from the high needs block which supports provision for children with special educational needs and disabilities (SEND).

Sufficiency issues in local SEND placements mean greater use of independent providers at significantly higher costs. An ongoing increase in the number of requests for Education, Health and Care Plans (EHCP) has also added to the budget pressures.

A contingency is held to help offset potential costs that were not known at the time of budget setting. Currently £1.524m of the contingency is available to North Northamptonshire Council (NNC) to meet further pressures. The council also holds earmarked reserves which may be utilised if savings are not identified.

It was also recently announced that North Northants is one of 19 councils across England to receive ‘exceptional financial support’ (EFS) from the government. It is to receive £3.9m in ‘capitalisation directions’ which permits local authorities to meet revenue costs by using capital funds for day-to-day spending.