Rotherham Council faces “significant financial pressure” of £18.2m budget black hole

In a financial report to full council on October 10, an overspend of £11.4m was predicted for the financial year 2022/23.

However, a new report to the council’s overview and scrutiny commitee states that the council currently estimates an overspend of £18.2m for the year.

More than £10m of the overspend is due to “unbudgeted costs” as a result of the war in Ukraine, inflation, energy price increases and the impact of the 2022/23 pay award.

The report adds that the overspend will be met through “significant use of the council’s reserves”, as well as a medium term financial strategy.

RMBC is not expecting additional funding from the Government to help mitigate the costs, and instead anticipates a potential reduction in Government funding.

The report puts the overspend down to placement pressures within children and young people’s services; the cost of school transport; and economic recovery from the Covid-19 pandemic.

The situation is not unique to Rotherham. The Local Government Association warned last month that councils are facing additional cost pressures of £2.4 billion in 2022/23.

In 2023/24, the LGA says there is a funding gap of £3.4 billion which rises to a gap of £4.5 billion in 2024/25 just to maintain services at pre-COVID levels.

It warns that to avoid a 10 per cent council tax hike, local authorities may need to make savings equivalent to stopping spending on all cultural and leisure services such as libraries, swimming pools, open spaces, combined with spending on waste collection and Trading Standards.