South Tyneside Council facing £7.7m revenue budget overspend

The figures were outlined to senior Labour councillors at a meeting of the local authority's cabinet as part of a budget monitoring update

South Tyneside Council is grappling with a projected budget overspend of £7.7m for the 2024/25 financial year, but council chiefs say that "prompt action" is underway to rectify the situation.

The figures were disclosed to senior Labour councillors during a cabinet meeting of the local authority as part of a routine budget monitoring update. This forecasted overspend is based on net expenditure for the first quarter of the 2024/25 financial year, from April to June. The council's revenue budget, which funds everyday services like waste collection, street cleaning and social care for children and adults, is expected to exceed its limit by £7.757m by the end of the fiscal year.

Major spending pressures include social care for children and families, with 'out-of-borough placements' alone accounting for a £3.5mn strain, in addition to agency staffing costs and support for disabled young people. A cabinet report highlighted that "there remains a shortage of appropriate placements for children with particularly complex needs" and that the "costs charged by external providers are very high".

Other areas putting stress on the revenue budget include pupil transport and adult social care services, notably the "volume of patients discharged from hospital into residential care", and winter maintenance costs for highways. South Tyneside Homes' integration into the council, along with beach and storm cleaning and open spaces, were identified as pressures. A cabinet report also highlighted an "underachievement of planning income" due to "reduced development related to the current economic climate".

Coun Jane Carter, Labour cabinet member for governance, finance and corporate services, detailed how measures are being implemented to reduce the overspend within the year. This included a "sustained reduction in the reliance of agency staff in key areas and recruitment of more permanent staffing", reducing the number of hire vehicles used, and "maximising" income and use of grant funding.

"Projections for the year indicate an overspend for the council of £7.8m for its revenue budget," Coun Carter informed the cabinet meeting. She added that this projection takes into account the continued increased demand in children's and adult social care and home to school transport, and persistently higher levels of inflation, especially around pay award and contractual inflation across all budget headings.