Slough council expects £15million overspend for 2023/24

Slough council will end up millions of pounds over budget by the end of the year – despite the significant efforts to try to improve its financial position.

Because of increasing costs in adult social care, inflation and difficulty selling off assets, Slough Borough Council (SBC) is in a worse position than it previously anticipated.

Though it has made savings, costs have ramped up higher than expected and the cash-strapped local authority has needed to use reserves – but cannot continue to rely on this, its chief executive has warned.

According to the council’s draft financial position for 2023/24, the provisional overspend is more than £15.5million. Its financial year ends in March.

National factors have played a part, including inflation and the increased demand for services, in particular for homelessness and adult social care.

There has been ‘increased complexity of care packages’ and an increase in fees for care providers.

These pressures created significant overspends – service departments collectively overspent by more than £22million.

The overspend will need to be financed from the council’s reserves. There are more than £3.2million worth of requests for drawing down from reserves in 2023/24.

There is about £53million in reserves, of which the largest is the General Reserve at £21million.

The Budget Smoothing Reserve is about £10.7million – and if the 2023/24 implications are not addressed, this reserve ‘will be depleted in the current financial year,’ officers have warned.

Analysis suggests pressure for 2024/25 too – £11.7million that ‘requires immediate mitigating action… as a matter of urgency.'

These arise from ongoing pressures in adult services (£4.8million), homelessness (£5.6million) and interest costs (1.2million).

The 2024/25 budget invested heavily in these areas, with growth built in of £9million for adult services, £3million for homelessness and £3million for interest.

But the level of demand has been such that this ‘may prove to be insufficient,’ officers wrote.

‘Almost all’ of overspends are explained by increased expense of care placements due to increased demand.

There were overspends related to costs of long-term support and care for older people (£.6.7million), people with learning disabilities (£3million) and mental health (£2.4million).

Some overspends are a consequence of the council not having been able to dispose of assets, meaning outstanding debt has remained. This includes the Akzo Nobel sale.

Slough Borough Council’s cash position has been ‘severely impacted’ by this, officers noted.

At a Slough council cabinet meeting on Monday (June 17), councillors stressed the importance of selling assets to ‘get out from under the debt’.

Council chief executive Will Tuckley said the local authority found itself with a ‘serious challenge’ on its hands that is ‘very concerning.’

He said the overspends in adult social care and homelessness would have ‘an inevitable knock-on effect’ on this year’s spending.

“We can’t be in a position where we’re relying on reserves to the extent we have needed to,” he said. “It’s not a sustainable position.

“The measures we’re taking have to be made quickly. They have to be measured and they have to be thoughtful, but they have to be made soon.”

On the flipside, he added, Slough’s savings were ‘pretty close’ to the target, and it coped well with children’s services – ‘which is clearly not the case in other councils.’