Rotherham Council faces £2.9m overspend as care costs rise

Rotherham Metropolitan Borough Council (RMBC) is facing a £2.9m gap in its budget as the cost of caring for vulnerable children and adults continues to climb.

Spending restrictions and funding reviews have helped bring the expected overspend down from £5.9m. But the council still needs to find more savings or use money set aside in reserves to balance the books.

Separately, the council expects an £8.1m shortfall in its schools grant budget for the year ending March 2027—£1.7m more than it predicted in July.

A report going before the council's cabinet on November 16 sets out how much the council expects to spend by the end of March 2027, based on its finances halfway through the year.

It shows children’s services are expected to spend £3.7m more than their budget, largely because of the cost of placements for children in care.

The placement budget alone is heading for a £6m overspend, although savings elsewhere in the department have reduced the overall gap.

The pressure remains despite the number of children in care falling from 481 in July to 475 in September. Over the same period, the number living in externally run residential children’s homes fell from 48 to 43.

Officers say rising prices, a shortage of suitable placements and increasingly complex care needs are keeping costs high.

Adult care, housing and public health services are expected to finish £1.9m over budget overall. Expensive care packages, agency workers and overtime are also adding to the pressure.

Elsewhere, the waste service is forecasting a £1.5m overspend, mainly linked to the cost of operating hired and spare bin lorries. School transport is also expected to cost £1.1m more than budgeted.

Across all council departments, spending is forecast to exceed budgets by £7.9m. Spending £5m less than expected in central budgets brings the council’s overall gap down to £2.9m.

The council has restricted non essential spending and reviewed grants and other funding to help close the gap. Vacancies and staff turnover have also reduced costs in some services.

The report says the aim has been to limit the impact on services while bringing spending under control.

However, the council also faces a growing problem in its separate schools grant budget, which helps pay for specialist education and support.

That budget is expected to fall £8.1m short this year, £1.7m worse than the previous forecast, as demand for specialist school places and extra support in early years settings exceeds expectations.

The accumulated shortfall is forecast to reach £10.4m by March 2027 and £20.4m by March 2028.

Temporary accounting rules currently allow the council to keep that deficit separate from its main budget. Those arrangements are due to end in March 2028.

Officers say further government support could reduce the council’s remaining bill to around £4m, but that funding has not been confirmed.

For the council’s day-to-day budget, work is continuing to find ways to close the remaining £2.9m gap.

The report says reserves are sufficient to cover the financial risk, but warns that repeatedly dipping into them beyond existing plans would be unsustainable.