Fife warned of ‘worsening’ financial position as officers draw up plans to tackle £18m overspend

Cabinet councillors will be asked next week to “note the worsening high-level financial position”.

They will also be asked to instruct Fife service directors to come up with plans to deal with the overspends - and bring departments within budgets.

With an estimated £18.6 million shortfall by February, councillors will be warned on Thursday that services with the biggest budget gaps should be taking “actions to minimise or mitigate” their overspends

“The current forecast suggests an overspend in the current year of £16.7 million,” a revenue monitoring report from Eileen Rowand, Fife’s Executive Finance Director states. “This is a combined result of service overspends of £18.6 million and an underspend of £1.9 million [in Contingencies].”

Cabinet councillors will be told that this current forecast will be “detrimental” to the council’s financial balances, and it will take the reserves to a “negative position unless corrective action is taken”.

Fife’ Health and Social Care Partnership is responsible for more than half of the predicted overspend – by the end of the year, it is expected to be £11 million in the red. Part of that bill will be picked up by NHS Fife as part of the partnership arrangement, but the council is expected to be on the hook for nearly £7.2 million.

“Adult Placements are reporting an overspend of £6.4 million, the majority of which relates to nonachievement of savings,” the Cabinet report states.

Other significant areas of overspend come from care at home services (£3.5 million) mainly due an increase in care packages. Direct payment and older people nursing and residential services are also predicting a £4.8 million gap due to an increase in demand. A Health and Social Care recovery plan is “currently being finalised and will be published in September”.

Education services, the Place Directorate, and the Communities Directorate are also reporting significant deficits.

Within education, Ms Rowand is predicting a £4.5 million gap on “non-devolved budgets”. This is down to maternity and long term absence cover as well as nursery and special education.

These overspends will be partially offset by £3.5 million of underspends in other areas, but the council will need to cover the remaining £1 million gap.

The council’s Place Directorate is also reporting an overspend of £3.5 million as a result of “unavoidable cost pressures”. Likewise, the Communities Directorate is reporting an overspend of £4.5 million, which is mainly within the Children and Families Service.

Going forward, Ms Rowand has recommended that the council’s executive directors “identify plans to reduce the level of overspends to within budget”.

“The scale of financial pressures on the council linked to the considerable cost pressures and service overspends going forward remain substantial and uncertain,” she said.

“Some Services are managing large overspends and actions to minimise or mitigate these should be taken.”

She continued: “Further control measures will also be considered.”

The report will be considered at Fife’s Cabinet committee meeting on Thursday, September 12. It will be available to view via livestream from the council’s website.

> Full coverage of the Cabinet committee will be on our website at fifetoday.co.uk