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Cllr Robert Chapman, cabinet member for finance. Photograph: Hackney Council
Hackney’s finance chief has warned of “tough decisions” ahead – after the council revealed it is heading towards a £36 million overspend.
Rising homelessness levels and pressure on children’s services, education, social care and health have seen the council add a “significant” increase to its spending forecasts.
“This level of overspend is a serious issue for the council and presents a major challenge going forward,” stated an updated overall financial position (OFP) report—the second released this year.
Cllr Robert Chapman, cabinet member for finance, insourcing and customer services, announced earlier this week that although Hackney is a “secure, well-managed council […]with our current outgoings set to exhaust our reserves within three years, we can’t simply continue spending more than we have”.
He said the Town Hall “intends” to publish an updated, medium-term financial plan in November, and “with it will come tough decisions”.
“Our residents will need to be prepared to see reduced investment in some areas, so that we can protect essential services in others – especially those for the most vulnerable,” the statement added.
The OFP report breaks down the overall increase of over £15 million.
A further £12.1m will be spent on homelessness prevention, £2.8m in chuldren and education, and £2.6m in adults, health and integration.
The council’s finance team are expected to report progress in mitigating the overspend in its report at the upcoming cabinet meeting on Monday 30 September.
“We should acknowledge that these actions will not fully mitigate this level of overspend and a significant use of our reserves will be required, a position that is not sustainable in the medium term,” the report stated.
The actions proposed include setting up a Budget Recovery Board, which would meet on a monthly basis.
Another focus is a review of agency staffing.
The report says an overspend of £1.5 million for staffing in children’s services and education is a result of “over-established posts and agency use”.
It also states that further cost savings will be pursued through developing special educational needs and disabilities (SEND) provision within the borough.
Elsewhere, the council has identified “non-essential” spending of up to £846,000 that can be saved, although it admits this is “relatively small compared to the total overspend”.