THE leader of Redcar and Cleveland Borough Council today called on the Government to address a crisis in the cost of caring for vulnerable children.
Cllr Alec Brown appealed to Chancellor Jeremy Hunt to prioritise action over the cost of children’s care placements in his Autumn Statement, which sets out the Government’s spending strategy, this week.
These costs, which have risen steeply, are a key factor as many councils nationally face significant financial difficulties in balancing their budgets.
Redcar and Cleveland Borough Council is proposing savings totalling £8.14m to offset a predicted shortfall in its budget for next year, caused, primarily, by the cost of placements for children in its care and the continuing high level of inflation.
The budget for placements is forecast to overspend by £6.7m this year and the council expects this huge cost to continue into next year.
The Council is also experiencing an unprecedented demand for other services, which is also contributing to the shortfall.
When the Government undertook its Comprehensive Spending Review in October 2021, which considered funding requirements for local government, the rate of inflation was forecast to peak at 4%.
Inflation peaked at 11.1%, meaning everything the council buys or commissions is now significantly more expensive.
Although the rate of inflation is now falling, the high costs remain and councils, including Redcar and Cleveland, have received no additional funding to address this.
The local government sector has lobbied government on the current extraordinary financial pressures being experienced.
As Mr Hunt prepares to deliver his Autumn Statement, Cllr Brown appealed for intervention to support councils in caring for vulnerable children.
“This is an issue which is overwhelming local government finances at the moment. It has nothing to do with politics; councils run by all parties are facing the same huge challenges caused by the cost of caring for children.
“Councils are the safety net of society and we cannot turn our backs on children in need – we will always be there when we’re needed, but this demand means we spend over 60% of our budget on providing social care for vulnerable adults and children, and we expect this proportion will only increase.
“These challenges have been exacerbated by the very high rate of inflation. Everything we do is far more expensive, but the amount of money we have received from Government doesn’t come close to compensating for the demand for services and the ongoing effect of high inflation.
“We know our residents are suffering due to the cost of living and we know they want and need us to provide our services every day, but we have no choice but to balance the books – not doing so would be a far worse outcome for everyone.
“I appeal to the Chancellor to address the biggest issue facing local authorities currently by giving councils funding that ensures we can care for vulnerable children.
“We have managed to reduce our in-year budget deficit from £7.7m to £4.7m. A huge amount of work has gone into that, but it is still a massive shortfall, and our depleted reserves, which we use to cover unbudgeted costs, can only be spent once and this is simply unsustainable.
“What we are facing is similar, in some ways, to running a household – we can only spend what we receive.”
The Council’s Cabinet will consider a report in early December which proposes the £8.14m in savings. The full details can be found at https://rcbc.moderngov.co.uk/ieListDocuments.aspx?CId=138&MId=382&Ver=4
The Cabinet will also consider whether to consult with the public and businesses about a proposal to increase Council Tax by 2.99% and the Adult Social Care Precept by 2%.