£1.5m blow to troubled children's services

ROTHERHAM Council departments found savings of £5 million this year—but bosses must still dip into emergency reserves as children’s services plunge deeper into the red.

The embattled Rotherham Borough Council department—working under a Government notice to improve—is forecasting a £5.1 million budget overspend.

This comes after the department ended the last financial year more than £4 million over budget and was allocated an extra £2.3 million this year.

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The borough council may yet have to make severe cuts across all areas after completing a financial review following the Government’s spending review.

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Strategic director of finance Andrew Bedford said: “Mitigating the impact of the reductions in Government funding and addressing the in-year pressures represents a significant financial challenge for the council.

“The proposals outlined to address this have been developed with the intention of addressing the key priorities and ambitions of the borough, safeguarding the most vulnerable, protecting frontline services and with a focus on the customer.

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“But a shortfall of £603,000 remains and it is therefore proposed that this should be funded from the general reserves and balances.

“Having reviewed the risks to which the council’s budget is exposed, and having regard to the exceptional nature of in-year funding losses, use of general reserves and balances to this limited extent is deemed both appropriate and prudent.”

Neighbourhoods and adult services is expecting a £1.1 million underspend and £2.2 million will be saved from “accounting opportunities.”

The chief executive’s office and financial services have found £430,000 between them.

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But the council still needs to delve into reserves for more than £600,000 to break even on the 2010/11 budget—in addition to the £1 million already taken from the contingency fund.

The bulk of the children’s services overspend—about £3.6 million—relates to looked after children.

When the original budget was set in March it was assumed that an average of 14 residential placements—weekly cost £3,400—would be needed. The current number is 23.

Relying on more expensive agency staff for social care has also hit the coffers.

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Mr Bedford said: “Work continues to drive the overspend down as far as possible while ensuring that children’s needs are met.”

Rotherham’s total reduction in revenue grants since the May election is currently £5 million. Nearly three-quarters of this has been covered, leaving an outstanding pressure of £1.4 million.

Mr Bedford said: “The Chancellor’s emergency Budget announced a number of measures that will not take effect until April and will be fully reflected in the council’s 2011/12 budget and financial strategy.

“There were, however, some proposals that will have an impact in the current financial year.

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“In particular, a two-year pay freeze for public sector workers earning over £21,000 and a flat rate £250 annual increase for those earning less.

“The impact of the last month’s comprehensive spending review continues to be assessed and the full implications of the proposals on local authority funding will become clearer when the local authority’s specific settlement is released at the end of the month or early December.”