Children's Services are pushing Dorset County Council budgets into the red – with the authority paying out millions to out of county private care organisations.

Figures for the end of the last financial year show the service was overspent by £6.65 million – and is now predicted to be £2.6 million over this year.

Adult Services is heading for a £1.5 million overspend – according to figures due to go before next Wednesday's Cabinet meeting.

But despite the overspends in the 2017-18 year the council's savings of more than £5 million elsewhere meant the authority finished the year with an underspend of £0.2 million.

Unaudited figures from Chief Financial Officer, Richard Bates, show that the the £61.7 million Children's Services budget finished the year on £68.4m.

“Pressures were primarily around the number of children in care and the mix of placements, agency spend and special education needs travel,” said Mr Bates.

His report shows that the overall number of looked after children (LAC) is fluctuating at around 450 – although this is down from a peak of 506.

“Analysis of the make-up of children in care also showed that lower-cost placements were replaced by higher-cost placements with Independent Sector Fostering Agencies and Independent Sector Residential Care Providers. This cohort of children caused the budget to be overspent by £7.9m in 2017-18.”

There was also an overspend of £0.4 million on agency staff while the SEN transport budget ended the year with a £0.5 million overspend.

The county council now hopes to be able to reduce the number of looked after children to 390 by March 2019.

At the end of May 2018, there were 443 looked after children, six fewer than at the end of April.

But the report to councillors warns that the authority has a number of complex children in high cost residential placements (46) and independent fostering placements (105).

“These numbers are most volatile and hardest to plan for and forecast,” it says, with a warning that a further six children are currently on the cusp of needing this privately provided care which can run to £200,000 a year for just one child in a specialist, residential setting.

“The priority is to reduce the number of children in the high cost residential and IFA placements and instead use our own, in-house foster carers whose recruitment process is currently in train. Running alongside this process we must reduce the rate of children entering care, getting us down to 390 as soon as safely possible. The pace of change required is both challenging and ambitious and there are risks associated with delivery.”

The report also spells out to councillors that overall Dorset County Council is expected to make savings of £18.8 million in its final year and that the first year of the new Dorset Council, which comes into being in April 2019, will also start with a deficit, recently predicted as approaching £7 million.

Members sitting as part of the Organisational Transformation Board have already confirmed that the county council will need to look to deliver savings to deal with the budget gap for 2019/20 as we cannot rely on full, first-year savings from Local Government Reorganisation.”