Dorset Council forecasts £8.1 million overspend as soaring care costs pile pressure on budget
Dorset Council has warned that ‘reserves might be used’ if projected overspending continues
increased demand and delayed savings put further pressure on its £466 million budget.
The projected overspend is equivalent to 1.7% of the council’s total budget. Officers have described the position as manageable but warned that spending controls will need to remain in place and reserves could be required if the situation fails to improve.
The biggest financial pressures are in Children’s Services and Adult Social Care, with both forecasting £3 million overspends. Both services are demand-led and have historically faced significant budget pressures.
The cost of caring for vulnerable children is a particular concern. There were 441 children in care at the end of July, including 56 placed in external residential accommodation.
The average cost of an external residential placement has now reached £6,870 a week – equivalent to about £360,000 a year for each child. That represents a 72% increase since 2020, adding substantially to the council’s financial burden.
Adult Social Care is also seeing demand and costs exceed budget assumptions. The council had planned to support 4,415 people at an average weekly cost of £887. By July, it was supporting 4,542 people, with the average cost rising to £930 a week.
Meanwhile, The ‘Our Future’ Council programme has failed to deliver all of the savings expected this year and instead is facing a £4 million shortfall, with some savings now expected to be achieved in future years rather than 2026/27.
Other services are also feeling the squeeze. Planning is forecasting an £829,000 overspend, partly because income from planning applications was around £300,000 below budget during the first four months as the wider economy slowed.
SEND transport costs are forecast to reach almost £22.5 million this year, up from £20.2 million last year.
Waste and recycling budgets are also under pressure because of lower recycled material values, reduced waste volumes and the cost of a new household recycling centre contract.
Despite the financial pressures, Cabinet is being asked to approve £10.6 million in new capital spending, including £2.3 million for Wimborne Community Sports Hub and £8.4 million for phase five of the Lyme Regis Environmental Improvement Scheme at The Cobb.