Council facing £4.5m black hole, report says

It has been predicted Middlesbrough Council will overspend this financial year

A council has forecast an overspend of £4.48m at the end of the financial year.

Middlesbrough Council predicted that if no further action was taken, there would be a black hole equating to 3.1% against the approved revenue budget, which is valued at £143.304m.

In September 2024, the council was predicted an overspend of £3.7m but it came in at the end of the financial year with an underspend of more than £2m.

Council officials have been encouraged to "make every effort" in order to control costs to achieve a balanced budget.

The council is legally required to set a balanced budget, which happened in February.

The Local Democracy Reporting Service (LDRS) said an initial figure listed as an overspend of £10.677m would not materialise, according to executive papers.

The documents said: "If actions to reduce this are not successful, the proposed use of central contingencies and other budgets totalling £6.195m can reduce the forecast overspend to £4.482m (3.1%) at year end."

Part of the £6.195m figure would involve using the remaining balance of the Middlesbrough Priorities Fund - which is about £2m, the LDRS said.

Anticipated underspends

The Labour-led council said it expected adult social care to have an overspend of about £1.5m at the end of 2025/26, while children's care was forecasted to be £6.672m.

The department of environment and communities anticipated an overspend of less than £1.9m, with other departments expected smaller overspends.

Meanwhile, there are some anticipated underspends, including £839,000 in the finance department.

As the 2024/25 financial year progressed last year, forecasts showed the projected overspend rapidly decreased to a point where there was a predicted marginal underspend.

Final figures showed a larger underspend, which meant not all of the pre-agreed exceptional financial support from central government needed to be used by the council to deliver on budget.