Councils deliver £1bn underspend despite ‘volatility of children’s services’
0English local authorities achieved an underspend on their revenue budgets of almost £1bn during 2017, despite children’s social care coming in £816m above planned expenditure.
The government’s revenue outturn summary released this week showed councils in England spent £90bn on services during the last financial year, compared to a total estimate, published in June last year, of £91bn.
However, the figure hid a 10.1% overspend on children’s social care, which is not covered by the new precept introduced during the year, allowing councils to add 3% to council tax bills to fund adult social care.
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Rob Whiteman, CIPFA chief executive, told Room151: “In absolute terms, these figures show that councils are more than delivering the savings outlined in their annual budget estimates.
“However, councils are still experiencing volatility in children’s services which mean they are far less certain about delivery of savings than they are in adult social care.
“Although adult care is a bigger budget, they feel more in control of it, which they don’t do about children’s services.”
Whiteman said that the Ofsted inspection regime for children’s homes has a considerable impact on what is spent by councils and that councils “don’t have an easy way of balancing quality, outcomes, need and resources”.
He added: “For example, Northamptonshire County Council has the same number of children in care than Essex, which has double the population.
“Undoubtedly Northamptonshire’s financial plight was made worse by the volatility of children’s services.”
Adult social care showed an underspend of £274.1m over the year, in which the government introduced the adult social care precept.
The largest underspend below last year’s estimates came in education services, which finished £1.0bn (3%) under budget, driven by continued academisation, where schools are taken out of local authority control.
This was on top of a cut in the planned budget of 2.5% on the 2016/17 education figure.
The other service areas which saw underspends during the year included highways and transport, down £245.7m on budget, fire and rescue (-£82.6m), environmental and regulatory (-£78.8m), public health (-£53.8m), and housing (-£5.8m).
However, outside of education, the largest underspend was £276.2m in the “other services” category.
In addition to children’s social care, there were overspends in planning and development (£110.6m), central services (£84.8m), culture (£34.8m), and police (£18.3m).
Paul Carter, chairman of the County Councils Network, said that overspend in children’s social care means that resources are having to be diverted from other services to maintain service levels.
He said: “In a climate of rising demand, inflation and substantial funding reductions imposed by central government, counties have delivered extraordinary efficiencies, but without extra resource the worst is yet to come in service cutbacks to prevent such huge margins of overspend in statutory services.”
