Council facing ‘an extremely serious financial position’

Councillors will be told the local authority’s latest accounts show a forecast £7.6m in-year budget overspend with next year’s budget (2025/26) showing an estimated £18.9m budget gap.

Current in-year pressures are being driven by cost pressures in both Children’s (£5.1m) and Adults’ (£2.4m) social care services.

To reduce the current in-year position, robust spending controls, a recruitment freeze on all but critical roles and a freeze on non-essential spending remain in place. The Council has also held sessions to review and scrutinise every budget within the organisation to identify further in-year savings.

Looking ahead to next year, the Council’s Cabinet will hear that the current £18.9m forecast budget gap is after £12.1m in proposed savings have been taken into account.

It is, however, anticipated that the current figures will be subject to change with the Government’s provisional Local Government Finance Settlement due later this month, which will set out the precise impact of measures announced in the Autumn Budget.

With insufficient reserves to close the £18.9m gap, a budget update at last month’s Cabinet meeting explained that the Council has been in contact with the Government about its extremely challenging financial position.

This could see the Council, as a last resort, apply for Exceptional Financial Support in order to help the local authority meet its legal duty to balance the Council’s budget in 2025/26.

Exceptional Financial Support gives councils temporary permission for a financial year to use capital funds raised through borrowing, or from the sale of assets such as land and buildings, to plug funding gaps in their day-to-day revenue spending. Any council which is granted this support is subject to an external assurance review.

Last February, 19 councils were given Exceptional Financial Support from the Government and survey results published by the Local Government Association in October found that 44 per cent of councils with social care responsibilities said they are likely to need to access this in the next two financial years (2025/26 and 2026/27).

Although the Council has reduced its current in-year budget deficit by £700,000 since the last Cabinet meeting, councillors will be told that it is vital that ongoing spending controls continue to be rigorously applied across the organisation to minimise the use of reserves so they can be used to support the 2025-26 budget.

The £12.1m in savings identified in next year’s budget include proposals to increase community-led support (£4.3m) to reduce demand on Adults’ services and reducing the cost of children’s residential placements £2m). There are also plans to increase the use of more local foster carers to save an estimated £377,000 and using community assets to improve the efficiency of services and outcomes for local residents (£421,000).

The 2024-25 budget proposals being tabled at next week’s Cabinet meeting assume a 2.99 per cent increase for core council tax and two per cent for the adult social care precept.

Final budget proposals will be tabled at the Cabinet meeting on 12 February, before being discussed and voted on at Full Council on 27 February.

In a separate report going to next week’s meeting, the Council’s Cabinet will be asked to endorse the Swindon 2028 transformation programme, which aims to deliver millions of pounds in savings over the next four years.

Councillor Kevin Small, Swindon Borough Council’s Cabinet Member for Finance, said: “Swindon is a microcosm of the wider local government sector and the Government is under no illusions about the scale of the issues we are facing.

“The cost and demand for social care services continues to rise, making up around 80 per cent of our budget.

“The Government recognises that system-wide reform of both children’s and adults’ social care is essential if these costs are to become more financially sustainable for local authorities. It has also committed to reforming local authority funding, for example, by introducing multi-year funding settlements from 2026/27 to give local authorities the certainty to plan and invest for the long term.

“While these much-needed reforms are very welcome, they won’t help us in the immediate term. That’s why we continue to do everything we can to cut spending, applying strict controls.

“We are also investing in a transformation programme in order to fundamentally change how we deliver services, achieve better resident outcomes and value for money between now and 2028.”