PREDICTED OVERSPENDS at Dorset Council have risen again – up from £12.6million at the start of the financial year to £16million on the latest figures.

A council report rates both the current and the residual risk from the overspend as ‘high’.

The figure is made up of £8.1 million of revenue spending and £7.8m on schools’ budgets.

A report to the cabinet says that the expectation is that the money will be paid from general funds or from reserves to meet the shortfall, although that will eat into council’s £28m reserve fund.

A report to cabinet next week (March 3rd) says: “The projected overspend can be managed using reserves without exposing the council to unnecessary financial risk over the longer term.”

The two big hitters are adult and children’s social services which between them account for most council spending and which the authority says are largely demand-led services, where demand is difficult to predict.

The main opposition group, the Lib Dems, have complained that much of the problem has been caused by the Conservative controlled council setting unrealistic budgets at the start of the year.

Adult social services is now predicted to be overspent by 7.7% at the end of the financial year which could amount to £8.6million, with a rise of £3.1 in the cost of care packages alone – at the same time the department had been expected to making efficiency savings of £5m although it is now acknowledged that this will not be be achieved.

Children’s services have a similar level of overspend and could now reach £9m, or 14% of its budget,.

The dedicated schools budget is expected to be £7.8m overspent, compared to the previous £6.5m estimate, although how this is treated for accounting purposes may yet change depending on a Government decision.

On the plus side two big pots of cash are likely to be put back into the budget – £9.7m from the central/corporate budget; money set aside for potential problems during the council’s first year which have not materialised; and around £8m through jobs losses during reorganisation, although set against this the council is expected by the end of the financial year to have paid out £9.5m in redundancy costs. The loss of staff is accounted for as a long-term saving, the redundancy costs as a one-off, giving an overall benefit to the council in its annual running costs.

Said a report from executive director Aidan Dunn: “There is no doubt that 2019/20 continues to be a challenging year. These challenges will continue …

“The Council remains confident that it has the resources available to overcome short-term pressures while it continues to refine the vision, strategies and operating model that will deliver the sustainable, dynamic and innovative organisation that Dorset’s residents need.”

The authority has one of the highest for council tax in the country and recently approved an inflation-busting increase in its share of the tax from April 2020 of just under 4per cent. Additional council tax bills from fire, police and town and parish councils will mean many ‘average’ band D payers in Dorset now paying £2,000 a year for the first time – almost double the amount in some wealthy London boroughs.