Concern over £5m overspend

Powys County Council’s Audit Committee has expressed severe concern about the forecast overspend in Adult Social Care which has the potential to be in the order of £5m. 

The Audit Committee is responsible for reviewing and scrutinising the authority’s financial affairs and make reports and recommendations on the authority’s financial affairs, including the Cabinet’s monitoring of the budget.

County Councillor John Morris, Chair of Audit Committee, has said that “it is vital that this overspend is addressed urgently because it puts at risk the financial stability of the Council going forward”.

The Council’s budget for Adult Social Care is £55m out of a total revenue budget for the council of £237m. All areas of the council have been requested to identify savings and any overspend in one area has to be absorbed within that department.

Cllr Morris said: “Overspending in one service puts pressure on the rest of the Council with other additional savings being required or reserves being utilised. The Council has to maintain a prudent level of reserves but the funding of considerable overspends will quickly deplete those held.”

Cabinet Member for Finance, Councillor Wynne Jones responded: “Projected overspends in several services have given cause for concern and as a result urgent action is being taken and a recovery plan is being formulated to address the situation.

“Obviously the size of the projected overspend in ASC Service is of huge concern, especially as this service has to deliver savings in the next two years as part of the Medium Term Financial Plan.

“Moving to a three-year forward financial plan has been a very positive move for the Council, but it is imperative that the Council lives within the strict spending limits set, otherwise this will lead to even more devastating cuts to front-line services.”

Cabinet Member for Adult Service, Councillor Stephen Hayes said; “Council Social Services throughout Wales are facing huge pressures as a result of rising numbers of older people, together with the effect of the Living Wage leading to increases in the payments we have to make to care providers. Those pressures are particularly acute in Powys where the proportion of older people is rising most rapidly, and where rurality makes care especially costly.

“I expect officers to keep their focus continually on costs and savings. However, it is vital that the council as a whole sets realistic budgets for social care to ensure a safe service can be maintained.”

A working group comprising of Audit and People Scrutiny Committee members, has been established to assist in supporting the council through this difficult time. It has met twice to gather information with the aim of interviewing the consultants brought in by the council (one of whom has already been interviewed) together with relevant Portfolio Holders and Senior Managers to assess the viability of the council’s Recovery Plan.