Warwickshire County Council cuts hole in budget by £17 million

STRINGENT spending restrictions have helped cut Warwickshire County Council’s expected deficit by almost two thirds – but only after placing service commitments on hold, writes Andy Mitchell, Local Democracy Reporter.

In September the authority reported a near £27 million gap between what it had budgeted to spend on delivering services and anticipated costs. That has come down to just under £9.5m and while that has meant another £5.5m coming out of reserves, the council now anticipates spending less money and using less of its savings overall.

However, the improved position is not without consequences.

As things stand, £13.5m is expected to be saved through tighter controls on managing staff vacancies, agency staff and overtime and cutting back on things like catering and hospitality, training and development, attending conferences and external venue hire.

That is more than the £12m target set out in September but a council report warns that “this position could deteriorate depending on whether service forecasts hold good”.

The detail of some of the improved positions highlighted in the council’s latest financial reports show that spending commitments have been put on hold. One example is the £100,000 saved on speeding, road safety and school safety “as a result of in-year staff vacancies which are being held temporarily to support spending controls”.

Economy and skills forecast an underspend of more than £500,000 “largely due to delaying and stopping some activities” in line with the controls and because of staff vacancies, while reduced spending of £158,000 in public health is put down to “an unutilised uplift in the school nursing budget” alongside “decreased demand” for drug and alcohol detox, inpatient treatment and domestic abuse listening services.

The council had budgeted £401m for delivering all of its day-to-day services and it now expects to spend an extra £41.6m. But that’s some £5.4m less than was expected to be two months ago, despite £6.75m being added to plug a shortfall in the dedicated schools grant.

The council started the financial year 2024-25 with £18m put aside to make up an expected shortfall in Dedicated Schools Grant funding but the overall gap is now more than £40.6m for the current financial year alone. The other £22.6m is being accounted for separately through the statutory override – a mechanism many councils use to prevent the burden being pushed towards other services.

In addition to that, £1.8m from investment funds and £7.6m from earmarked reserves brings down the funding gap to £9.487m which, if unmitigated, will have to come out of the council’s short-term financial risk reserve.

In April 2024, the council held more than £194m in reserve overall. If these most recent projections play out as expected, that will come down to £137m.