Council takes action as Peterborough authority's overspend rises over £11m

Peterborough City Council is facing a significant financial overspend of over £11m and has been warned that the deficit is heading in the wrong direction.

From the most recent data, recorded ad the end of July, the council was projected to have a £11.1m overspend of its £220m net revenue budget.

A report presented to cabinet on just September 17 stated that the overspend would be £10.3m.

The council’s Corporate Services branch has warned that the overspend in heading in the wrong direction and having a detrimental effect on its reserve balance and financial resilience.

The latest report puts the reasons for this overspend continuing to rise down to a number of reasons including: - High interest rates affecting borrowing - A rise in the number of children’s social care placement - Demand for adult social care packages - A rise in homelessness, driving up the cost of temporary accommodation and use of Bed and Breakfasts - Pressure across leisure services with cost neutral not being achieved - Lower than anticipated income relating to solar energy, due to the level of panel degradation and an increasing number of assets offline and needing repair - An increase in cost of the Materials Recycling Facility contract

A number of financial controls have been put in place in order to tackle the overspend. These include a recruitment freeze, a short term freeze on new procurement and a capital expenditure moratorium to limit the need for new borrowing.

The council will also carry out a review of savings rated at high risk of delivery.

A breakdown of the financial forecast has been provided by each department: - Places & Economy: Budget £19.513m. Overspend £3.942m - Children and Young People: Budget £55,229m. Overspend £3.575m - Adult Social Care: Budget £75.180m. Overspend £1.278m - Public Health: On budget - Corporate Services: Budget £32.114m. Underspend £68,000 - Legal & Governance: Budget £4.491m. Overspend £170,000 - Capital Financing: Budget £31.100m. Overspend £2,195m - Financing: On budget

Taking all of the numbers into account, the council has forecasted that its budget deficit could range from £11.206m to £25.689m in the 2027/28 financial year.

Forecasts shows: Best case 2025/26: £13.274m, 2026/27: £11.007m, 2027/28: £11.206m

Worst case: 2025/26: £24,284m, 2026/27: £23,642m, 2027/28: £25,689m.

The council’s finances will be discussed at the authority’s Growth, Resources and Communities Scrutiny Committee on Tuesday (September 24) at 6pm.