Slough budget overspend hits £17.5m as report branded ‘difficult and sobering’

Slough Borough Council’s lead member for finance said the council’s budget report for the second quarter of the year was ‘difficult and sobering’, with serious steps needed to be put in place to reduce spending.

At a cabinet meeting on Monday (November 17), the budget monitoring report for the second quarter of the year was presented to councillors.

The second quarter revenue budget overspend is projected to be £17.5million.

A large portion of this is because of the council’s expected £9million overspend as part of its Dedicated Schools Grant (DSG) High Needs budget.

The Dedicated Schools Grant is used by local authorities to fund their budgets for schools.

Councillor Dexter Smith (Con, Colnbrook and Poyle), the leader of the council, said the overspend for the Dedicated Schools Grant was a ‘significant problem’.

Sue Butcher, the council’s director of children’s services, said the ‘safety valve’ arrangement for children’s services was made without the knowledge of a 250-case backlog.

Ms Butcher said: “It’s absolutely the right thing that we worked through that backlog. But it has been problematic.”

Ian O’Donnell, the council’s interim executive director for corporate resources, said this is a nationwide issue for many local authorities across England.

Mr O’Donnell said: “Many councils have already reached the point at which, if their DSG deficit were to actually crystallise, it would tip them over into a section 114.

“We’re not quite at that point, but the direction of travel for us is quite rapid, and we are developing an ever-increasing amount that we’re carrying on our balance sheet for this overspend on the DSG.”

When a local authority issues a section 114 notice, it cannot have any unnecessary spending, focusing instead on providing statutory services like temporary accommodation and social care.

“Despite the fact that we are in a very difficult financial position, I would not be considering a section 114 because we are in conversation with Government over our financial position,” Mr O’Donnell added.

Cllr Smith wanted to know if Slough was in a worse position than it expected to be.

Cllr Puja Bedi (Con, Colnbrook and Poyle), the council’s lead member for finance, said: “This report is difficult and sobering.

“It presents a serious challenge for the authority and significant mitigations will be required to protect the council’s position.”

In the first quarter of the year, the council had a £20.7million forecast overspend, but officers identified ways to save money and reduce this to £13million.

The local authority’s position has worsened by £3.9million since then.

Pressures included an extra £5million, which is needed to fund adults’ services, and an additional £1.7million to fund children’s services.

But Mr O’Donnell said that Slough Council has ‘upped the ante’ with the measures taken to control spending, and he is ‘hopeful’ that there will be reductions in spending.

He said a review of all agency staff is being carried out, on top of a hiring freeze which is currently in place. There will also be a review of any third-party contracts the council has.