Council's financial juggling act

Rotherham Council’s spending position at the end of May - two months into the current financial year - has been described as “positive” with the small underspend projected.

But that position will only be possible by raiding a fund of more than £5m set aside to provide cash for spiralling spending anticipated in advance.

In reality, the directorates - the arms of the council which provide front-line services - are already £4.2m off target.

The council will face another squeeze because the pay settlement for council staff is expected to cost more than the budget allowed for - the increase is set nationally and beyond local control.

Each directorate has also been set a target to make internal savings over the course of the year, and if they are not achieved, the sums will not add up.

A financial report to be considered by the authority’s ruling cabinet spells out both the complexities of the financial situation, stating: “Pressures reported in the directorates are largely due to demand led pressures, in particular in relation to children’s residential placements.”

An irony is that the council is performing well in terms of keeping numbers of children who need care down, by early interventions to provide better solutions.

The report explains: “The biggest challenges at present on delivery relate to Children and Young Persons Service placements, which is forecast as a significant cost pressure.

“It remains challenging to clearly link the positive outcomes being delivered by CYPS in terms of reduced ‘looked after children’ numbers to the savings targets, principally as the service has seen rising market cost pressures and a number of significantly high cost placements”.

To balance the books, savings of almost £7.5m will need to be made and so for almost £1.5m of that total has been found.

So far, no savings have been found from Adult Care, Housing and Public Health, which has been asked to find £600,000.

The report warns that should any of those savings not be possible “the council will need to quickly identify and seek approval or alternative options.”

The report is due before cabinet on July 7.