ST HELENS Council is forecasting a “significant” overspend amid major financial pressures – with the leader warning there is no “magic money tree”.

The financial monitoring report for period two of 2024-25 came before the cabinet at its meeting last week.

It provided members with the forecast financial position in relation to the revenue and capital budget for 2024-25, as well as summarised the council’s reserves and balances position and included the interim treasury management strategy report.

Forecast overspend

It stated that the failure to deliver agreed savings presents a “key risk” to the council.

According to the report, there is a forecast portfolio overspend of £8.910 million against the updated net portfolio budget of £185.838 million.

“There was a similar portfolio overspend in both 2022-23 and 2023-24, making 2024-25 the third consecutive year in which the council is forecasting a significant overspend,” it added.

“One-off corporate underspends are forecast to offset the portfolio overspend by £3.410m, resulting in a forecast net budget overspend of £5.500m for 2024-25.

“This presents a significant financial risk to the council. There is an urgent requirement for mitigating actions to be implemented by management to minimise this risk.

“The main pressure is within children & young people, the main drivers of this being increasing demand, social work staffing challenges and unachieved savings.

“The pressure in the transport & environment portfolio is primarily as a result of the unsuccessful retendering of the recycling contract.

“The other main pressure is within integrated health & care, reflecting ongoing demand pressures and the complexity of service users’ needs.

“If the forecast overspend is not reduced, 2024-25 will be the third consecutive year in which the council has significantly overspent, requiring further unplanned use of reserves. It is vital for the council’s financial sustainability that it is able to control its costs and operate within its approved budgets.”

New Government

As recommended, the cabinet noted the “severe forecast outturn revenue overspend position” for 2024-25, noted the latest position with regard to the implementation of 2024-25 budget savings and those “brought forward from prior years”, approved the revised capital programme, and noted and approve the latest “reserves and balances position”.

During the meeting, council leader Cllr Anthony Burns highlighted that the new Labour Government is “only a few months in”, adding “everyone expected a magic money tree, but this document shows that there isn’t one”.

Furthermore, Cllr Burns said: “I was asked before about what the difference, it will be, having a Labour Government, to us as an authority, will it be trickier because it’s our party in power, and I said absolutely not, because we’ve got a Government that’s listening to us and that we can lobby.”