Council to be given exceptional financial support

Soaring demand for adult social care has played a large part in Cheshire East Council (CEC) overspending its budget, the local authority has said.

The government has stepped in to grant the council £17.6m in exceptional financial support (EFS) for 2024-25.

CEC said it would use the funding arrangement to balance its books for the financial year.

While the largest overspend has been in adult social care, the council also said there were pressures in children's services and rising borrowing costs associated with funding pupils with Special Educational Needs and Disabilities (SEND).

EFS allows councils to use a system known as capitalisation, which can allow them to borrow money or treat some day-to-day spending - known as revenue costs - as longer-term capital costs.

As such, it essentially gives local authorities more flexibility about budget decisions.

CEC has faced financial difficulties in recent years, with the government recently issuing a formal notification of its concerns.

Last year, the council signed off a transformation plan which aimed to save nearly £100m.

In a report to councillors, CEC said the £17.6m adult social care overspend was down to rising costs of individual placements.

A £3.5m overspend in children's services was attributed to there being more youngsters in care, the use of agency staff, and rising home-to-school transport costs.

The council said it had come in under budget in a number of areas, chiefly in staffing costs.

And while there had been an underspend in its highways and transport department, car parking revenues had been lower than predicted.

While services for SEND children are funded through a Dedicated Schools Grant, Cheshire East currently has a deficit in this area, meaning that the borrowing costs to provide them have been forced up.

If approved by councillors at a meeting on 3 June, £9.8m of the £17.6m EFS money will be allocated towards meeting the 2024-25 overspend.

It is proposed that £5.3m will be put in an earmarked reserve to cover the costs of CEC's current change programme, while the remaining £2.5m will go into the council's general reserves.

Earlier this year it was announced that CEC was granted £25.3m in EFS for the 2025-26 financial year.

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