Bradford Council will issue a section 114 notice if it does not receive exceptional financial support from central government in both 2023-24 and 2024-25.
A formal request for this support is set to be approved at an extraordinary meeting of the council’s executive next week (21 December), in which Bradford’s “unprecedented” financial situation will be laid out in full.
The council is now forecasting budget pressures of £73m in the current financial year and £103.6m in 2024-25, while reserves will be exhausted by the end of 2023-24.
Bradford Council’s “financial emergency” was previously detailed in late October by director of finance Christopher Kinsella in a Q2 finance position statement.
The new report explains the rationale for Kinsella’s recommendation that the authority apply to the government for exceptional financial support and the reasons a s114 notice might be issued.
The council’s forecast overspend has risen to £73m from the £68m predicted in the Q2 finance position statement, with an overspend in the Bradford Children’s and Families Trust (BCFT) rising from £45m to £49m “due to further increases in costly external placements, and a £1m increase in council commissioned and provided services”.
To help address this, the trust has submitted a Type 1 contract variation request of £13.5m for year to date costs which has been agreed and paid. This is contained within the overspend.
The report notes that expenditure on children’s social care has increased significantly for several years, with “big increases in demand for children’s social care, with more complex cases to manage and challenges in recruitment and retention of social care staff impacting on budgets”.
Indeed, the numbers of children in care rose by 61% between 2012 to 2022 while the rate of children in need increased by more than 60% over a similar period, according to Bradford Council data. The cost of providing placements for children has increased with residential placements going up from an average cost of £3,600 a week for each child in 2020-21 to an average £6,000 per week in 2023, the authority said.
This means that the average cost for one placement each per year is now £312,000, which Bradford Council said was “similar to the annual council subsidy of a small leisure centre”.
The need for expensive residential care placements for children and high levels of agency social workers are the main causes of the budget pressure in Bradford Children and Families Trust (BCFT).
A key part of Bradford’s plan to mitigate the overall 2023-24 overspend included the backdating of a revised Minimum Revenue Provision policy, but this option is no longer being pursued in light of “further and more recent external advice”.
As a result, the application for exceptional financial support will include c£58m in relation to the current financial year, and additional amounts will be required for 2024-25.
Bradford said it had been in close dialogue with the Department for Levelling Up, Housing and Communities (DLUHC) and the Department for Education (DfE) about its financial challenges over the past year, concluding that exceptional financial support was “the only mechanism” available to support the council through its difficult financial position.
The council is developing a “significant” asset disposal programme which will be outlined in a report to the executive in February 2024. However, the scale will be insufficient to bridge the gap, the report noted, and the council would therefore have to borrow, which will come with stipulations under a potential capitalisation directive.
Bradford Council has already stopped all non-essential spending, frozen non-essential recruitment and is conducting a full spending review.
Susan Hinchcliffe, Bradford Council’s leader, commented: “Our finances, like many other [councils] across the country, are in a perilous position. We are being forced to look at all the services that we provide and make extremely difficult decisions and we know these will not be popular and will have an impact on our residents.
“The Bradford Children and Families Trust is led by a respected and experienced chief executive and I am calling on the government to make sure that is properly funded. We need the government to provide better funding for disadvantaged children across the children’s social care sector nationally. But specifically in Bradford we know that we have the youngest population in the country as well as a high level of social need. The Competitions and Markets Authority identified a dysfunctional market in which a small number of providers make excessive profits and government needs to address this urgently.
“In the Autumn Statement the chancellor did not even mention the funding crisis faced by local council services and in particular he didn’t mention the word ‘children’ at all. There’s a huge gap in funding for children’s social care services across the country including here in Bradford.”
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