Increasing pressures on children’s services pushed St Helens Council over budget during the last financial year, as the number of children in care continues to rise.
The overall position for the council’s 2018-19 revenue budget, which covers its day to day costs, is a net overspend of £2.2 million.
It is the first time since austerity began in 2010 that the council has reported an overspend.
Council leader David Baines told the new-look cabinet this week the overspend is “almost entirely” down to pressures on children’s services.
And the recently appointed cabinet member for finance, Martin Bond, warned that local government finances are in the most “dire and difficult of circumstances”.
“It’s an unusual position for us as an authority but not that unusual set against the overall aspect of the pressures children’s services are putting on local authorities,” Coun Bond said.
“It is all linked to austerity. It is all linked to poverty.
“And it is politically motivated austerity driving that I’m afraid, ten years of that now is pushing it out the other end.”
Many of the pressures stem from the costs associated with caring for looked-after children and providing support to those young people ready to leave care.
According to the revenue outturn report, the number of looked-after children increased from 442 to 472 during 2018-19.
It is understood that around 500 children are now under the care of the local authority.
The council has also had to make several investments to children’s services during the financial year.
This was after Ofsted delivered a damning verdict of the town’s children’s services in August following a focused visit to review the services for children in need.
The watchdog subsequently issued three out of a possible four priority actions alongside a comprehensive action plan.
In September cabinet approved an immediate £800,000 investment for children’s services.
The following month cabinet approved the use of £2 million from the children’s services reserve to help mitigate the impact of the financial pressures on the portfolio.
A further £2 million in gains from the council’s participation in the Liverpool City Region (LCR) business rates pilot in 2018-19 was also realigned to children’s services.
Coun Bond said the country is facing an “existential threat” regarding the lack of funding for children’s services.
He pointed to the recent government report children’s services funding from the Housing, Communities and Local Government (HCLG) Select Committee, which cited the Local
Government Association’s (LGA) estimates there will be a £3.1 billion funding gap for children’s services by 2025.
“These are the most dire and difficult of circumstances financially for local government I think that’s ever been known in modern times,” Coun Bond said.
“And we need to acknowledge the work that the officers do and elected members of responsibility do to make sure we continue to deliver for our most vulnerable people.”
Coun Baines, who was recently appointed as the new leader of the council, said the £2.2 million overspend is “not an ideal situation”.
He highlighted the LGA report in January that said 9 out of 10 councils are being pushed into the red because of “severe” funding shortages for social services.
The Labour leader added the high number of looked-after children in the borough is directly related to the “politically motivated” austerity agenda of the Conservative government.
Coun Baines said: “The number of looked-after children is at the highest level in England since the 1980s, and this is what austerity does.
“It doesn’t just push people into poverty and exacerbate the causes of poverty, it also strips back the services that are there to support people if they do find themselves s in poverty.
“And that is the perfect storm we find ourselves in at the moment.
“And it is politically created, it’s political motivated and it could be politically ended with a simple decision to give local government the funding that we’ve lost since 2010.”
Coun Baines also slammed the Tory Party for launching a leadership contest amidst a backdrop of Brexit and the local government funding crisis.
“What’s sad and frustrating at the moment is we’ve got a government, which has just lost its leader,” Coun Baines said.
“And although they were told by the European Union not to waste this six-month extension, they’ve decided to plunge us into a leadership election for their own party and their own sake.
“And not one of them has mentioned local government funding. Not one of them has mentioned looked-after children, not one of the candidates for Prime Minister.
“So that tell s us everything we need to know about that particular party and their priorities.”
Cabinet noted the revenue outturn position (subject to audit) for 2018-19 and approve the revised revenue budget for 2019-20.