Council deep in debt

By Trevor Bevins - Local Democracy Reporter 19th Jan 2025

DORSET Council ended the last financial year owed £135.6million for goods and services.

Despite the high figure more than 70per cent of the amount owning has since been recovered.

The council say it is now concentrating on collecting debts older than 90 days and those who are either struggling to pay, or a few who say they will not pay.

The figures has been revealed as the authority reports a worsening financial position with a confirmed £13.2million overspend for the first six months of this financial year.

Council reports say the figure is worse that expected: "This level of overspend is of significant concern as it identifies unbudgeted service pressures of £12.6m, which can only be partially mitigated."

Data to be published in the coming days (from Monday 20th) for the third quarter of the financial year, up to December 2024, are expected to show the overspend accelerating.

Councillors on the authority's audit and governance committee have been critical of the time-lag in reporting financial figures and the annual yo-yo of some departments going over budget, only to retrieve or almost retrieve, the situation late in the year.

Tory opposition group leader Cllr Andrew Parry said the situation was "frustrating" with councillors getting the financial figures at a time when it was almost too late to take action.

He said one of the phases inevitably boiled down to: "well, we could have done something, but it's too late now," he said.

Other committee members questioned why some budgets, mainly for adult social care, children's services and housing, often predict overspends, even at the very start of the financial year, with historic data showing the trend has been happening since Dorset Council was formed in 2019.

The council's senior financial officer, Aidan Dunn, told councillors that budgets for people who needed help and support were difficult to predict in advance and could rapidly become over-spent by a change in circumstances – with the current flu figures likely to result in more demand for social care services spending.

"The economic outlook we are seeing nationally is worrying and the implications for local government finance means we are going to get less and less Government funding… we need to take our destiny in our own hands. We can, and must, lobby for additional funding but we must shape our own future," he said.

Councillors were recently told that for the coming year the authority would be more than £80million short in the funding it needs to provide services.

One of the ways the council is seeking to close the shortfall is in providing its own places within the county for both children's services and vulnerable adults to reduce having to pay independent providers, often out of the county, for services.

Mr Dunn said the age profile of Dorset was now higher than that of Japan which would present further budget challenges as the county's population became even older.

"We are a real outlier in the country. If we can sort out and address how to fund social care for an ageing population then others, nationally and internationally, will be interested to learn how we do it," he said.

     

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