Nov 19, 2022, Teignmouth Post: County council in ‘serious danger’ of going bankrupt warns opposition leader https://www.teignmouth-today.co.uk/news/county-council-in-serious-danger-of-going-bankrupt-warns-opposition-leader-573656
DEVON County Council’s opposition leader has accused the ruling Conservative administration of being ‘asleep at the wheel’ over its financial problems and warns it is in ‘serious danger of going bankrupt.’
Liberal Democrat councillor Julian Brazil’s comments come after the council’s finance chief admitted Devon is now ‘an outlier’ for a rising overspend on special educational needs and disabilities (SEND), with a combined three-year deficit on the service projected to be £124 million [$148M] by April 2023.
Devon is still awaiting a decision by the government about what will happen to the figure, which is effectively debt. A current ring-fencing arrangement for the overspend is set to end next year.
The council is also warning it faces a budget shortfall of £75 million in the next financial year, with costs spiralling due to inflation and surging demand for supporting vulnerable children and adults.
Cllr Brazil, speaking before the chancellor’s autumn statement, said it all amounted to the leadership at County Hall having ‘lost control of spending, and as a result we are in serious danger of going bankrupt.’…
‘We’re very much like the Titanic; just ignoring the dangers ahead of us until we’re just about to crash into the iceberg.’
On the projected £124 million [$148M] SEND overspend, the council says it continues to await the outcome of a ‘safety valve intervention’ programme with the Department for Education, which could involve money to help plug the financial black hole along with reforms to the system.
Speaking at a meeting on Tuesday, director of finance Angie Sinclair explained that Devon wasn’t included in the first phase of the safety valve programme as it didn’t have one of the highest overspends….
Cllr Brazil said: ‘It is a national problem but we’re one of the highest and I think the problem with it is that the overspend has just been getting worse and worse … It’s totally unsustainable for that to continue.
‘As far as I can see, the council don’t have any coherent plans to address that issue and we will just continue to rack up the debt and inevitably go bankrupt.
‘The idea of financial credibility with this administration is just non-existent. We’ve hidden behind the fact that the SEND [deficit] can be taken off the balance sheet but, in truth, it’s a massive revenue overspend and we’ve failed to address it.’
In a statement, Cllr Hart said in response: ‘Devon is not alone in facing severe financial difficulties, with costs for caring for vulnerable adults and children soaring. Four in five councils across the country with responsibility for these important services are all reporting the same thing.
‘Supporting children and families with special educational needs is a particular issue for many councils and we are working hard here in Devon to bring costs under control whilst continuing to support people well.
He added: ‘We will have to see exactly what the net effect is of all the changes in the chancellor’s autumn statement, but it is highly likely that we will still have some very difficult decisions to make.’
The financial update by the government included plans to allow authorities with social care reponsibilities, like Devon, to raise council tax by up to five per cent next year.
Whilst Cllr Hart said he does ‘welcome any decision that will allow local authorities flexibility with regards to potential council tax rises,’ he acknowledged that people are facing ‘real issues with the cost of living,’ adding: ‘I will not want to increase their burden any more than necessary.’