Welch council heading towards a budget overspend by over £2m
Pembrokeshire County Council is projected to exceed its budget for the 2024-25 fiscal year by more than £2 million, as reported by a recent update. While this overspend is significant, it represents a decrease from earlier estimates that indicated a potential £4 million shortfall. The looming budget crisis is primarily attributed to anticipated overspending in social care and housing sectors amounting to a staggering £10 million. The council’s cabinet recently reviewed the quarter three figures, revealing an expected £1.4 million overspend by the year-end, a notable improvement from the previous forecast of £3.9 million in quarter two. When factoring in a projected £0.7 million deficit in council tax collection for 2024-25, the overall overspend could reach £2.1 million.
Throughout the budget monitoring reports, it is evident that financial challenges have been escalating, with the forecasted overspend progressively rising from £2.9 million in quarter one. Councillor Joshua Beynon, the cabinet member for corporate finance and efficiencies, highlighted the escalating demand and complexity in services such as School ALN provision, Children’s Services, Adult Services, and Homelessness. Efforts to mitigate costs are ongoing, but the sustained high demand is expected to persist into the following financial year and beyond, creating enduring budget pressures that necessitate additional savings, revenue generation, or potential council tax hikes to address.
The approved budget for 2024-25 stood at £303.5 million, designed to accommodate the surging demands and costs within critical service areas. The council is confronted with material overspends in Social Care and Housing which account for the bulk of the financial strain. Despite attempts to curtail expenses, projections indicate that these heightened demand levels will endure into the next financial year, intensifying the financial burden. The projected outturn at quarter three of 2024-25 is estimated at £304.9 million, indicating a potential overspend of £1.4 million. Additionally, an expected shortfall in council tax collection for the same year could further reduce funding by £0.7 million, resulting in a total gap of £2.1 million that may need to be covered from reserves.
To mitigate the financial strain, the council has imposed a freeze on non-essential expenditure for the remaining period of the financial year. This measure aims to control costs and navigate the impending budgetary challenges effectively. As Pembrokeshire County Council grapples with the impending budget overspend, stakeholders are urged to closely monitor the financial developments and consider viable strategies to ensure fiscal stability in the face of escalating demands and constrained resources.
As local authorities nationwide grapple with financial pressures, the situation in Pembrokeshire serves as a stark reminder of the complex funding issues facing councils. The allocation of resources and balancing of budgets remain key challenges for local governments as they strive to deliver essential services amid increasing demands and constrained financial frameworks. The resilience and proactive measures undertaken by councils like Pembrokeshire County Council in addressing budgetary constraints will be crucial in safeguarding service delivery and financial sustainability for the communities they serve.
In conclusion, the projected budget overspend highlights the urgent need for strategic financial planning and effective resource management at the local government level. It underscores the importance of sustainable financial practices and prudent decision-making to navigate the evolving financial landscape and ensure the continued delivery of essential services to residents.