Cheshire East budget black hole blamed on inflation and care costs

The council said it had already introduced measures to cut costs and increase income

Cheshire East Council is warning it faces spending over its budget this year, due to inflation and rising costs of social care.

It is forecasting an £18.7m shortfall.

The local authority said it had already brought in spending controls and recruitment reviews.

The council's deputy leader added there was uncertainty around recent government announcements, such as scrapping HS2 and closing asylum seeker hotels.

A report to the Cheshire East Council's finance committee said prices and demand for children and adult social care services continued to rise, "reflecting complexity of care needs and market conditions".

A financial review earlier this year reported a potential £12.8m shortfall.

• Black hole in town hall budgets rises to £5bn

• Pressure on government to re-examine council funds

As a result, the council introduced reviews of spending and recruitment.

Despite savings of £4.3m being identified, this second financial review is forecasting an even larger shortfall.

BBC research earlier this year found councils across the country expect to be £5.2bn short of balancing the books by April 2026 - even after making £2.5bn of planned cuts.

Cheshire's two other councils have also forecast shortfalls in their budgets.

'Cutting costs'

Craig Browne, deputy leader of Cheshire East Council, said costs and demand "continue to exceed" the approved budget.

He said that despite cutting costs, including through reducing library opening hours, and measures to increase income, such as charging for green waste, the savings "will not be enough".

"Added to this is the uncertainty surrounding recent government announcements, including the scrapping of HS2 north of Birmingham and asylum seeker accommodation, and uncertainty about winter pressures on health and care services," he said.

The Local Government Association has raised concerns that closing hotels may shift the cost of accommodating asylum seekers to councils.

The Home Office said: "The pressure on the asylum system has continued to grow, which is why we have taken immediate action to speed up processing times and cut costs for taxpayers.

"To minimise the risk of homelessness, we encourage individuals to make their onward plans as soon as possible after receiving their decision, whether that is leaving the UK following a refusal, or taking steps to integrate in the UK following a grant."