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Nottinghamshire County Council faces £3.5m budget overspend

Nottinghamshire County Council is currently grappling with a projected £3.5 million overspend for the 2024/25 financial year, as detailed in the latest Financial Monitoring Report.

This forecast, based on data from the fourth monitoring period of the year, reveals significant financial pressures across key service areas, with rising costs and increased demand contributing to the council’s challenging fiscal outlook.

The report highlights that the council’s budget for the year, approved in February 2024, is facing mounting challenges due to economic uncertainties and inflationary pressures. With an annual budget of £638.8 million, the council had anticipated balancing its books, but the combination of escalating service demands and a volatile economic climate has resulted in a projected overspend of £3.5 million.

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One of the main contributors to the overspend is the Adult Social Care portfolio, which is forecast to exceed its budget by £6.2 million. This is largely due to an increase in the number of working-age adults requiring care—more than 600 additional individuals—far surpassing the council’s initial estimates. Other notable areas facing financial difficulties include Children and Families, Education and SEND, and Economic Development & Asset Management.

Key Budget Pressures

  • Adult Social Care (£6.2m overspend): The largest overspend stems from the Community Social Work and Therapy Division, which is dealing with rising care costs due to the influx of working-age adults. While projects are in place to mitigate these costs, including a review of the Technology at Scale Strategy and more intensive case reviews, the portfolio still faces significant challenges.
  • Children and Families (£2.4m overspend): The external placement of vulnerable children has led to an additional £4.2 million in costs, although this is partially offset by a £1.8 million underspend in internal fostering, where a decline in available foster carers has exacerbated the need for more costly external care solutions.
  • Education and SEND (£0.9m overspend): Increased demand for Education, Health and Care Plans (EHCPs) is putting pressure on the council’s SEND services. High staff turnover and reliance on agency staff are contributing to the overspend. The council is also reviewing the resources needed to implement improvements following a recent SEND inspection.
  • Economic Development & Asset Management (£0.8m overspend): Higher cleaning and maintenance costs have pushed this area over budget, although management actions are underway to reduce the overspend.

In contrast, the Transport and Environment portfolio is expected to underspend by £0.8 million, thanks in part to lower-than-expected costs for home-to-school transport contracts. The council also reports a £6.4 million underspend on central items*, including interest on cash balances and grants.

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*Central items =  primarily interest on cash balances and borrowing, together with various grants, contingency and capital charges.

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Nottinghamshire County Council’s capital programme for 2024/25 has also seen changes, with a revised total of £183.8 million. The main areas of capital spending include education, transport, and infrastructure projects. Significant capital investments include £64.4 million in Education and SEND projects and £76.2 million in Transport and Environment.

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The council approved £6.7 million in savings for the 2024/25 financial year, but the report warns that some savings may be at risk of slippage, particularly in the Adult Social Care portfolio. Efforts are being made to identify further savings to balance the books.

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The report outlines several risks to the council’s financial stability, including the uncertainty of joint commissioning with health services, the impact of inflation on traded services such as catering, and the long-term costs of implementing improvements in SEND services.

Inflation, which had briefly fallen to the government’s target of 2% in June 2024, has since increased, with predictions of continued volatility in the months ahead. This inflationary pressure is being felt particularly acutely in areas such as social care, where recruitment and retention challenges are compounding financial difficulties.

Moreover, the council is grappling with national economic challenges, including the rising cost of living and a competitive labour market. Staffing shortages in key areas such as social care and facilities management are further exacerbating the financial strain.

Adding to the complexity is the wider political landscape. With local elections scheduled for May 2025 and ongoing uncertainties around government funding, the council remains cautious about its future financial position. The 2024/25 budget was based on a one-year central government settlement, and there are concerns that future grants may not meet the council’s needs, particularly in light of rising service demands.

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