County council ‘facing danger of bankruptcy’
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 were made 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 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 support for 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.”
Council leader John Hart (Conservative) said: “Devon has always been known for its careful and prudent financial management,” but admitted it has some “very difficult decisions to make.”
However, Cllr Brazil claimed the leadership has been “asleep at the wheel,” adding: “We’ve had austerity for a number of years now. We should have been preparing and doing strategic changes at the top and we’ve totally failed to. 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 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.
At a meeting on November 15, director of finance Angie Sinclair explained Devon was not included in the first phase of the ‘safety valve’ programme as it did not have one of the highest overspends. But she admitted that, since then, “more recent figures show us as top in some league tables and second in some others. So, yes I would class us as an outlier.”
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.”
In a statement, Cllr Hart said: “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.”
Cllr Hart 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.”