Growing financial pressures at Warwickshire County Council have prompted a councillor of more than 30 years to admit he has "never seen it this bad".

The authority's latest financial performance report was discussed by cabinet this week. It shows that as of the end of quarter three, £7.821 million more than budgeted for is expected to be spent across the financial year 2023-24.

Council budgets are complex beasts made up of many moving parts. The real overspend is set to be £18.765 million but some of that is offset by "one-off" funding.

Another important element is that the original budget, set in February 2023, was reduced by £10.252 million to top up savings pots for future years, so while the gap between the budget and what is set to be spent has grown by more than £2.4 million, the amount the council expects to spend is now lower than it was when assessed at the end of the second quarter of 2023-24.

The biggest headache, as it is for most education authorities, is the £17.5 million extra that needs to be found to cover the shortfall in High Needs Block funding, money from the government to support children and young people with special educational needs and disabilities (SEND) up to the age of 25.

That includes £9.37 million more than planned on independent school places.

On its own, that looks like it accounts for the bulk of the council's problems but the other pressures that have been offset by unexpected income or other savings add to the overall volatility of the outlook, making it increasingly difficult to plot courses to balanced budgets. 

Environment, transport and planning is more than 10 per cent – £6.2 million – over budget, the vast majority of which is on home-to-school transport.

The bill to transport SEND students nearly £3.3 million over budget with another £2.6 million extra required for mainstream transport. Between the two, the shortfall has grown by more than £1 million in one financial quarter – a three-month period.

An £8 million-plus shortfall on social care and support has been blamed on increased demand, inflation and recruitment difficulties, dragging back plans that the council had earmarked to save almost £6 million.

Within that, spend on older people's services, including residential, nursing and domiciliary care, is expected to be more than £10 million over budget.

The shortfall on residential and extra care placements for children is £8.3 million due to "market price rises" and a surge in demand. The report also notes how the most complex care packages can cost up to £30,000 per child, per week – £1.5 million per year.

Part of the solution to that is for the council to build and run its own children's homes but efforts on that front are also set to come in £845,000 over budget.

Staffing costs within children and families are set to be more than £4 million over budget, more than £3.3 million of which is attributed to agency staffing costs as the council grapples with higher case rates, while the bill for transporting children in care is set to be £688,000 more than expected.

Much-needed boosts are to come from £17.4 million worth of extra grant funding, while £14.6 million is set to be created through savings on capital financing costs and higher returns on council investments.

£11.4 million from those windfalls is to be pushed towards making up the shortfall on the Dedicated Schools Grant, while £1.5 million will pay for higher-than-predicted staff pay increases across council departments.

Cllr Peter Butlin, the deputy leader who also oversees the county's finances, highlighted the issues with SEND, home-to-school transport and children's placements, noting that laws give the council "very little room to manoeuvre", but he added: "We are starting to see a tapering out in that increase in overspend. Hopefully we will start to see it fall but do not underestimate the pressures we have."

Liberal Democrat leader Cllr Jerry Roodhouse cited the "ever-increasing problem" of the funding of education and the impact it could have on the setting of the 2024-25 budget, which is set to happen in early February. 

"The only bit to be thankful for is that we are not alone," he said.

"We are in a slightly better place than a lot of other local authorities but clearly, a solution has to be found at some stage.

"This cannot carry on as it is, the numbers keep increasing. It will be interesting to see what happens with the budget, if anything. I know discussions are going on and I know the County Council Network has been doing some lobbying.

"Hopefully we can bring some greater pressure to bear on the government to actually bring us some relief but if we can't, looking at the budget as it is at the moment, it is going to be extremely tight. 

"The pressures are building up on adult social care at the same time. I have never seen it this bad before, not on this council." 

Cllr Butlin replied: "It is a good analysis of the problems we have. 

"There is no silver bullet, it is trying to find a way of balancing the budget while fulfilling our statutory duties in providing services."