Coventry City Council has raised concerns that the cost of its services is becoming “unmanageable” as it faces a £12.1m budget gap for the current financial year.
A report, which will be presented to the council’s cabinet on 29 August, outlined that the majority of Coventry’s underlying overspend comes from within both adults and children’s social care services, with the areas accounting for nearly £11m of the budget gap.
The report highlighted that the budget pressures in adults and children’s social care have been caused by the “continuing high level of inflation within the economy and difficult conditions within social care markets”.
Richard Brown, cabinet member for finance at Coventry City Council, said: “In Coventry, in 2011 we spent around 40% of our budget on social care and in 2023 it is now almost 70%. As well as dealing with greater numbers of vulnerable people who need complex care packages provided by external companies, the cost of all services continues to spiral due to inflation.
“We expect to have a budget gap of £12.1m at the end of 2023/24 but the underlying position is significantly higher than in previous years. We will need to take further action, or it will become unmanageable in the future.”
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‘Significantly higher’ overspend than previous years
The report detailed that in the last financial year (2022/23), Coventry also faced a budget gap of £6.7m, which had to be bridged using the council’s reserves. “This indicates a serious financial trend for the council which is not sustainable over the long term,” the report explained.
However, the cabinet report stated that Coventry’s underlying overspend for 2023/24 is “significantly higher than has been experienced in recent years”.
In addition, the report outlined that “significant management action” has already been factored into the forecasted £12.1m budget gap. “Actions taken are of a largely one-off nature, meaning the underlying position is significantly higher,” the report stated.
“This is a significantly high figure by historical standards, and represents a serious enough cause for concern for the council, such that emergency in-year actions should be considered.”
Brown stated that he plans to write to the government about Coventry’s current financial position to request they step in, “otherwise more and more councils will find that they are simply unable to balance their budget”.
“If the government doesn’t take action then councils like us, who have so far managed to cope with the financial challenge, will be facing a situation where we have to take a hard look at some of the services that local people value and decide whether they can continue to provide them,” Brown continued.
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