I don’t think many people realise the high proportion of spending that goes on adult and children’s services.
If you look at the recent budget papers it shows that the three areas of adult care, children’s services (WCF) and home to school transport (most of the cost is for SEND children) total almost 69% of the council’s revenue budget (£287m out of £417m).
Council Q1 Forecast Financial Position 24/25
And if you look at the budget papers for children’s services in particular and go to Dedicated Schools Grant (the money the government gives to school to support pupils with high needs), it shows an expected deficit of £87m by the end of this financial year. Currently the deficit sits as a negative unusable reserve on the balance sheet permitted via a statutory instrument. In other words, it is a massive debt that the government lets us ignore. But the council has to use its own money to fill this gap. If the government decided to stop allowing this statutory instrument (the override is due to end in March 2026), then we and many other councils would go bust!
Dedicated Schools Grant Outturn 2023/24
So, if you add that £87m to our current spend on adult and children’s services, it means that we spend around 74% of our revenue budget on support for adults and children. So, three-quarters of our spend is on care. This is unsustainable.
Also, don’t forget that the demand and cost are rising in both sectors, especially in children’s services. There are more children with SEND needing extra support. And the cost of supporting looked after children in care homes can be massive – sometimes over £1m per year per child!
If you thought that we could use our reserves to fill the funding gap, I’m afraid we have already done that and cannot continue to do so. Our useable reserves (Risk reserves) are forecast to be under £20m next year. Fourteen years of Conservative cuts, coupled with Worcestershire County Council’s management of finances, has left us in a position where the council is at a high risk of running out of money over the next few years.
Reserves