• Swindon & Wiltshire Economy
• Wednesday December 4 2024
• Author Name: Peter Davison

Swindon Council identifies £20 million black hole in finances

Swindon Council has identified a nearly £20 million black hole in its finances. The ‘extremely serious financial position’ is to be discussed at a meeting of the council’s cabinet next week.

The local authority’s latest accounts show a forecast £7.6 million in-year budget overspend with next year’s budget (2025/26) showing an estimated £18.9 million budget gap.

The council says the current in-year overspend is being driven by cost pressures in both Children’s (£5.1 million) and Adults’ (£2.4 million) social care services.

To reduce the gap, a recruitment freeze “on all but critical roles” and “a freeze on non-essential spending” will remain in place.

Looking ahead to next year, the cabinet will hear that the current £18.9 million forecast budget gap is even after £12.1 million in proposed savings have been taken into account – these savings include proposals to increase community-led support (£4.3 million) to reduce demand on Adults’ services, and reducing the cost of children’s residential placements by £2 million).

The council anticipates that the current figures will be subject to change with the Government’s provisional Local Government Finance Settlement due later this month, which will set out the precise impact of measures announced in the Autumn Budget.

The council has been in contact with the government about its “extremely challenging financial position”.

This could see the council, as a last resort, apply for Exceptional Financial Support in order to help the local authority meet its legal duty to balance the council’s budget in 2025/26.

Exceptional Financial Support gives councils temporary permission for a financial year to use capital funds raised through borrowing, or from the sale of assets such as land and buildings, to plug funding gaps in their day-to-day revenue spending.

Any council which is granted this support is subject to an external assurance review.

Last February, 19 councils were given Exceptional Financial Support from the government and survey results published by the Local Government Association in October found that 44 per cent of councils with social care responsibilities said they are likely to need to access this in the next two financial years (2025/26 and 2026/27).

Final budget proposals will be tabled at the cabinet meeting on 12 February, before being discussed and voted on at Full Council on 27 February.

In a separate report going to next week’s meeting, the cabinet will be asked to endorse the Swindon 2028 transformation programme, which aims to deliver millions of pounds in savings over the next four years.

Councillor Kevin Small, Swindon Borough Council’s Cabinet Member for Finance, said: “Swindon is a microcosm of the wider local government sector and the Government is under no illusions about the scale of the issues we are facing.

“The cost and demand for social care services continues to rise, making up around 80 per cent of our budget.

“The Government recognises that system-wide reform of both children’s and adults’ social care is essential if these costs are to become more financially sustainable for local authorities. It has also committed to reforming local authority funding, for example, by introducing multi-year funding settlements from 2026/27 to give local authorities the certainty to plan and invest for the long term.

“While these much-needed reforms are very welcome, they won’t help us in the immediate term. That’s why we continue to do everything we can to cut spending, applying strict controls.

“We are also investing in a transformation programme in order to fundamentally change how we deliver services, achieve better resident outcomes and value for money between now and 2028.”