Nottinghamshire County Council is forecasting a £1.7 million overspend for the 2025/26 financial year, according to its latest budget monitoring report to Cabinet.
The Financial Monitoring Report for Period 11, due to be presented on 23 April, sets out the council’s financial position against the budget approved in February 2025, with overall pressures partially reduced from earlier in the year. The current forecast represents an improvement of £2.5 million compared to the previous month’s position, but still highlights ongoing financial challenges.
The overspend is largely driven by continued demand pressures in adult social care, where costs are forecast to exceed budget by £13.3 million. This is mainly linked to increased demand and complexity in community social work and therapy services, although some of the pressure has been offset by the use of grant funding.
Other service areas show a more mixed position. Children and families services are forecast to underspend by £0.7 million, largely due to staff vacancies in early years and family hub services, while transport and environment services are expected to overspend by £1.2 million. The latter is linked to pressures in home-to-school transport and delays to planned savings from the introduction of a street lane rental scheme.
The council is also benefiting from a £10.7 million underspend in central budgets, including lower-than-expected borrowing costs and additional business rates funding from government. These factors are helping to offset wider service pressures and reduce the overall deficit.
Despite this, the report highlights significant ongoing risks to the council’s finances, particularly in relation to rising demand for statutory services such as adult and children’s social care, inflationary pressures and workforce shortages.
The financial position for special educational needs and disabilities remains a major concern. The council is forecasting a £38.8 million overspend on its high needs budget for 2025/26, driven by increasing numbers of children requiring specialist support, particularly in independent provision.
This follows an £18.1 million overspend in the previous financial year, which significantly reduced reserves. As a result, the council expects its non-schools reserve to fall into a deficit of around £36.7 million by the end of the current year.
Nationally, high needs funding has been under sustained pressure, with spending exceeding funding by up to £800 million per year between 2018 and 2022. The government has announced plans to absorb most of these deficits from 2028, subject to councils agreeing reform plans with the Department for Education.
The report also outlines delays to elements of the council’s capital programme. A revised capital budget of £171.4 million has been agreed for 2025/26, but around £19.6 million of spending is now expected to slip into future years. This includes £17.1 million of delays within transport schemes such as the Bus Service Improvement Programme and Transforming Cities Fund projects.
In response to financial pressures and reduced reserves, the council has also taken out £30 million in long-term borrowing during the year, earlier than originally planned. This reflects a reduced ability to rely on internal reserves to fund capital spending.
The report will be presented to Cabinet for noting, with councillors asked to review the latest position and ongoing risks as part of regular budget monitoring.
