DORSET Council is predicting an overspend of millions of pounds and might have to dip into its reserves to help cover costs.

Next week Dorset Council’s cabinet will be meeting to discuss its financial position and forecasts for the end of the first quarter of the financial year.

A report put before councillors is forecasting an overspend for this financial year of £7.1m on directly controlled budget, and up to £5.5m on funding for schools and education.

Dorset Council says there are a number of reasons for this, but it’s mainly due to an increased demand for its services.

Cllr Peter Wharf, Deputy Leader and portfolio holder for Corporate Development and Change, said: “This financial year is challenging for us. But I am confident that the local government reorganisation and the creation of Dorset Council put us in the best possible position to manage our financial position. We will continue to push for better funding for social care from Government. In the meantime, I have confidence that officers across the council will work hard to improve our financial position throughout the year.”

Dorset Council says work is underway to address the forecast overspend to deliver a balanced budget by the end of the financial year.

The council has reserves of around £29m due to savings made by all six former councils, which is more than double the minimum recommended levels of reserves – £14.5m.

This means there are sufficient reserves available to cover budget costs this year if required.

According to Dorset Council, since its creation in April, significant savings have been made as a result of local government reorganisation.

A reduction in the number of councillors from 204 to 82 has produced £400,000 in savings.

Meanwhile, a reduction in the number of senior manager roles, and in staffing costs for areas where there is duplication and overlap like finance, HR, and IT is anticipated to achieve savings of £5.2m in 2019/20 and £10m in total.

There has also been savings made on insurance, audit fees and other activities, where

the council now only pays for one organisation rather than six.

Dorset Council has a total budget of £295m a year.

Dorset Council says the forecast overspend is mainly due to a growing demand for its services.

This includes supporting children with Special Educational Needs and Disabilities.

The number of children requiring an Education, Health and Care Pla (EHCP) has risen by 67 per cent since 2013, but there has only been a seven per cent increase in funding.

Meanwhile, the number of children being taken into care to keep them safe from immediate risk of harm has increased.

Residential care placements are required for highly vulnerable children or those who might present a danger to themselves to others, which can cost between £3,000 and £8,250 per week.

Alongside this there has already been an increase in these placements in the first three months of this financial year.

Dorset Council is also responsible for providing support for vulnerable an frail older people and people with disabilities, and with an ageing population this is on the rise.