Rising costs of adult social care blamed for budget-busting spending this year, reports Simon Allin, Local Democracy Reporter

George Meehan House and (inset) Dana Carlin — George Meehan House and (inset) cabinet member for finance Dana Carlin

Haringey Council’s cabinet member for finance claims the authority “has been well financially managed” despite a £20million in-year budget gap and low cash reserves.

Soaring spending on adults’ and children’s social care has left the civic centre forecasting a £20.5m overspend on its agreed budget for the current financial year, meaning departments will have to scramble to make further savings to ensure the council balances its books.

Its unearmarked reserves, designed to ensure it can manage financial risks, total just £15.1m.

Several local authorities have recently issued Section 114 notices – effectively declaring bankruptcy and barring them from making new spending commitments – including Birmingham, Croydon, Thurrock and Woking.

But Dana Carlin, cabinet member for finance and investment, said the council was not “not in a position where we are going to have to issue a Section 114 notice”.

“Haringey has been well financially managed,” she said. “But this is a pivotal year for us, and there are going to be difficult decisions to make to ensure that we keep within our budget and that we set a balanced budget this year and going forward.”

The main reason for the budget gap is £17.5m of extra spending on adult social care – down to both growing demand and an increasing number of complex care packages – plus a further £1m on temporary accommodation caused by rising homelessness.

Cllr Carlin, who was speaking at a meeting of the council’s overview and scrutiny committee on Thursday (12th), said other local authorities were in similar positions and blamed the government for failing to properly fund adult social care.

One of the reasons Birmingham City Council had to issue a Section 114 notice was the £1.1billion it has spent settling equal pay claims brought by former employees.

Under questioning from the committee, Cllr Carlin said she was not aware of any similar issues that could affect Haringey Council.

She explained that one of the problems facing Haringey is that it receives “far less” funding for healthcare than neighbouring boroughs, leaving the council to foot the bill for care.

When committee members questioned her on the reserves, Cllr Carlin admitted the £15m of unearmarked reserves was “low”, adding: “As well as everything else, we need to start building up our reserves again.”

The council’s earmarked reserves, which are ringfenced for specific purposes, stand at £82m.

Josephine Lyeseight, the council’s finance director, insisted the reserves were “adequate” after accounting for an additional “resilience reserve”, although she agreed the levels should be increased.

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