Council battling rising prices and demand for services in ‘exceptional times’

Friday 10th June 2022 8:00 am
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Cllr John Hart, chair of Team Devon and leader of Devon County Council (Image: Daniel Clark) ()

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Devon County Council is experiencing the ‘worst of all worlds’ as it battles to keep spending in check.

It has revealed an overspend of £3.3 million against last year’s budget of over half a billion pounds, with finance member Phil Twiss admitting the current financial year ‘is already looking much tougher.’

He warned: ‘We clearly need to transform how the DCC business operates or our longer-term sustainability would not look too good.’

Children’s services and adult care continue to be the biggest financial concerns. Combined, the two departments spent £13 million more than budgeted last year, although underspends in other areas – some because of the pandemic – helped reduce the total overspend to £3.3 million.

A report to this week’s cabinet meeting added: ‘After two years of pandemic impact, the council is operating in exceptional times where demand for services is higher than ever before, set against a backdrop of rising prices and labour market shortages.’

Leaders at County Hall are also understood to be concerend about what will happen to a huge and rising overspend to support children with special educational needs and disabilities (SEND).

The overall figure, which is effectively debt, now stands at £86.5 million.

However, as local authorities have been told to put SEND overspends into separate ring-fenced accounts until next April, the figure doesn’t appear on Devon’s main balance sheet.

The council has been in discussions with the Department for Education about how to deal with the balance since December, but an agreement has yet to be reached.

Picking up on Cllr Twiss’ description of the budget figures as an ‘indication of the health of the county council,’ new Lib Dem group leader Cllr Julian Brazil (Kingsbridge) said: ‘Looking at it, I’d say we’re on death’s door, quite frankly.’

He said it was ‘unsustainable’ that some of the extra money pumped into children’s and adult services in the latest budget is from reserves.

He asked: ‘If we continue on this trajectory at what stage and when will Devon be bankrupt, insolvent?’

Director of finance and public value Angie Sinclair said various factors meant the council was experiencing the ‘worst of all worlds at the moment.’

On whether it was a ‘blip’ she said: ‘I think this is a blip as far as the pandemic is concerned, but I don’t think it’s a blip that’s going to be one year. I think this is going to be ongoing for some time.

‘We have the cumulative effect of both the pandemic and the global situation. We have inflation at the moment running at nine per cent. The indications are it could reach 10 per cent by the end of the year, perhaps even more, maybe as early as August.

‘We’ve got huge fuel price pressures and the county council isn’t immune from this, so we’re seeing massive increases in the cost of our services at the same time that the pandemic and an ageing population and the improvements that we are trying to make in children services is driving up demand.’

Ms Sinclair believes the council is ‘lucky’ that last year’s overspend was just £3.3 million, adding: ‘I think it could easily have been much worse than that.’

Cllr Brazil asked Conservative leader, Councillor John Hart (Bickleigh and Wembury): ‘How long are you going to support a government that is bringing this county to its knees?’

Cllr Hart said: ‘We are lobbying government on a regular basis about funding, but as long as the government says we have to raise an awful lot of our money out of council tax, we have no choice.

‘And on the basis of that – if we don’t raise council tax and don’t get the money, we don’t offer the services to the people of Devon.’

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