IMMEDIATE action will be needed to balance Newport council’s budget which is currently predicting an overspend of £723,000 for this financial year.

An increased demand for adult community care, with 3.7 per cent more users than last year, mean its budget is forecast to be overstretched by £1.4 million.

Children’s out-of-area placements are predicted to cost the £813,000 more than budgeted, while the cost of independent fostering agencies is predicted to be £737,000 overspent.


These overspends are mitigated by underspending in other areas, bringing the overall budget forecast to a £723,000 overspend, as of September.

A report to be considered by the council’s cabinet next week says the budget forecast has “worsened each month to date with new and increasing budget overspending forecasted.”

Meirion Rushworth, the council’s chief financial officer, says in the report: “The forecasts here paint a challenging picture and the cabinet should approve an immediate and robust review of budgets and spending plans to bring about a balanced position.

“The pattern of service overspending is not sustainable in going forward and will cause real challenges to the council’s overall financial position and financial sustainability in due course, unless it is controlled.”

Schools are also predicted to overspend against their available funding by £3.1 million.

Twelve schools are anticipating a negative balance position at the end of the financial year – one nursery, five primaries and six secondary schools.

A report says officers are “working closely” with these schools to ensure deficit recovery plans are in place and action is taken to reduce spend.

“The school’s current level of overspending is very challenging with the real prospect of school reserves being completely utilised, even after significant in year additional funding from Welsh Government,” Mr Rushworth adds.

A report says the forecast position is against a backdrop of “prolonged pressure on public services” from reduced income, rising demands and costs of running services, which has resulted in significant budget savings over the last five years.

The council’s cabinet will meet on Wednesday to discuss the position and to agree that council chiefs work with heads of service to “bring about targeted reductions in service area spending.”