Suffolk County Council savings of £2.5 million held back by council reform, finance lead says

Savings of £2.5 million will be held back by council reform, the county's finance lead has said.

County cabinet members discussed the authority's budget forecasts after the first quarter of the financial year, leading up to the end of June, on Tuesday.

Cllr Richard Smith MVO, the council's finance lead, said the authority was facing a different scale of problems and challenges than it had anticipated when it set the budget back in February.

The council papers showed an overspend of £13.3 million against its budget, with the hole to be filled by reserves, which were projected to fall by £18.7 million by March next year.

Cllr Smith said the council had a 'high level of budget discipline' and would continue to find ways of being even more efficient, but warned the picture may not get a great deal better by February.

He said: "The deficit will not be expunged by the end of the year — I hope, by some extent, it may be mitigated, but this is a budgetary pressure which we will have to live with."

Meanwhile, the £28.4 million target for savings and mitigations is set to be missed by £4.7 million — of this, £2.5 million will be held back due to 'complications' associated with the upcoming major council reform.

As it stands, Suffolk’s six county, district and borough councils will cease to exist by May 2028 and be replaced by unitary authorities with more powers.

But this has meant certain measures will be held back, including a review into the potential merger of the county council's two call centres.

Cllr Smith said this was the 'wisest thing to do' as there was uncertainty over what the reform would mean for these services.

As has been the case in councils across the UK, the biggest pressures come from the authority's children and young people's (CYP) directorate, which Cllr Smith said was 'one of our biggest priorities'.

He stressed it was nearly impossible to predict with certainty where budget pressures would occur, with demand continually increasing.

Cllr Bobby Bennett, the council's CYP lead, explained extreme cases of external residential placements could cost as much as five new foster care placements.

"Acknowledging this reality does not mean we accept it," she said, "it means we must be smarter, more efficient and more effective in how we deliver our services.

"We are partway into a root and branch transformation of children's services — it's not about making cuts, it's about fundamentally rethinking and improving every part of our work."

On education, Cllr Andrew Reid, whose portfolio also includes special educational needs and disabilities (SEND), pointed out Government funding was not enough to meet demand.

As it stands, the council is forecasted to overspend on its High Needs Block (HNB) — the proportion of education funding used on SEND services — by as much as £64.4 million by February.

The HNB is a part of the council's Dedicated Schools Grant, the total money the council gets from the Government for education.

The overspend is due, Cllr Reid said, to increasing demand for independent, non-maintained specialist places, top-up funding for schools struggling to deal with costs, and bespoke education packages for children without any provision.

Currently, councils can accumulate an overspend of the DSG reserve through a ‘statutory override’ without it affecting their books — Suffolk is set to be £161 million in the red by the time the override runs out, in March.

Cllr Reid said: "It is a complex picture within this area [...] but one which we continue to face head on.
"We know our financial risks and challenges and remain prudent and measured in our approach."

The Government is set to outline its plans for the override with its promised overhaul of the SEND system.