COVENTRY City Council is heading towards a ‘tipping point’ as the authority announced a forecast overspend of £12.1million in its first financial monitoring report of the year.
But the authority said it had already taken a range of actions to reduce its spending and added councils across the country are reporting the impact of inflation and increasing demand is making it impossible for them to manage within their existing budgets.
The Council said Adult and Children’s social care accounted for almost £11million of the underlying overspend.
It reported an overspend of £6.7million in 2022/23 with the shortfall covered through cash from its reserves.
The cabinet member for finance, Coun Richard Brown, said some difficult decisions needed to be taken to balance the budget now and in the future.
He added: “The majority of the problem has been caused by the rising costs and increased levels of demand in adults and children’s social care, which are continuing to see unprecedented rises in expenditure.
“In Coventry, in 2011 we spent around 40 per cent of our budget on social care and in 2023 it is now almost 70 per cent.
“As well as dealing with greater numbers of vulnerable people who need complex care packages provided by external companies, the cost of all services continues to spiral due to inflation.”
Coun Brown said he was planning to write to the government to ask them to step in.
“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.”
The shadow Cabinet member for finance and resources, Coun Tim Sawdon said the forecast overspend came as ‘no surprise.’
He added: “We are run by an incompetent Labour administration that last year managed to waste £1million on a loan to the City of Coventry Trust when it clearly wasn’t viable and spending more buying Tom White Waste for a recycling facility which wasn’t fit for purpose.”
The council’s Quarter One Finance Report will be discussed at Cabinet on Tuesday, August 29.
