AN increase in the number of Looked after Children due to the impact of Covid-19 on families has been highlighted as the biggest contributor to a £3.5million council budget overspend in Coventry.
Councillors in Coventry’s Cabinet will tomorrow (Tuesday December 1) consider the 2020/21 Second Quarter Financial Monitoring Report (to September 2020). They are asked to approve a newly revised spending forecast, to utilise Government grants to support the council’s approach to Covid and an application for emergency funding.
Covid costs, including losses of income and costs of PPE equipment, have led to a total increase in spending of £33.2m – but most of these costs have been offset so far by a series of allocated government grants.
Nearly all of the overspend has been caused by an increase in Looked after Children numbers, with Children’s Services “experiencing significant pressure” as result of the Covid-19 pandemic, a new report reveals.
Coun Richard Brown, cabinet member for strategic finance and resources, said: “With the unpredictable financial landscape it is extremely difficult to accurately predict what our financial position will be like in March 2021.
“What I do know is that officers have done a good job of managing the budget since the effects of Covid-19 began to take effect at the end of March.
“We have acted decisively across a wide range of services, but we have still had to absorb an £8.6m overspend in children’s services.
“At the same time, we are really pleased that we have been able to continue work on a number of Capital Projects and we expect to complete spending of £249m by the end of the year.
“These projects will help the city to gradually recover from the economic impact of Covid-19 and demonstrate our determination to move forward.
“We would usually expect to improve our financial position as we work towards planning for our budget in 2021/22 but this will prove more of a challenge due to the uncertainty of the ongoing pandemic and the unpredictability of social restrictions.
“At this stage it is important to flag that meeting our legal responsibility to set a balanced budget next financial year creates a massive challenge, after 10 years of imposed austerity that has seen in-year revenues slashed by £120m.”
On Wednesday (December 3) the Education and Children’s Services Scrutiny Board will hear how Children’s Services are “under extreme pressure”, of the acute shortage of experienced children and families social workers – both in Coventry and nationally – the increase in demand, increasing caseloads and high levels of vacancies. According to a Children’s Services briefing note, this has resulted in increased numbers of agency staff, with a shrinking agency market.
The financial impact of Covid on collection of Council Tax and Business Rates within the current year will not be felt until 2021/22.
An initial planning estimate of this impact is £6m, although this is likely to be revised as part of the Budget process.
Other elements of the Budget which could similarly be subject to significant change means that the Council will enter its most difficult budget setting process for some years.
But despite this, Coventry City Council continues to plough ahead with Capital projects, which have been only marginally affected by the Covid-19 restrictions. Projected spending on schemes – including the A46 Link Road, Public Realm and the Coventry Station Masterplan is forecast to be £249m.
The Budget Report approved in February 2020 included an indicative gap for 2021/22 of £19m. The council reports that the combination of uncertainty facing local government finance beyond the current year and the continued impacts of Covid mean that many of the fundamental elements of the financial plan are fluid at present.
