‘DIFFICULT’ decisions will have to be made by Barnsley Council on the services the local authority delivers unless its current funding plight ‘improves significantly’, finance bosses have warned.

The council’s 2024/25 net budget of £256.6m was agreed by full council on in February but a report - which will be discussed by councillors next week - revealed the year’s first quarter has already seen bosses admit services will cost £4.3m more than anticipated to deliver over the 12-month period.

A key driver of the extra cost has been attributed to children’s social care, which will be £3.2m overbudget.

This is largely due to increased fees for looked-after children placements, which have cost £2.3m.

Despite a reduction in the number of looked-after children in Barnsley, the council faces financial challenges due to reliance on costly external placements and independent fostering which are both ‘out of its control’.

Director of finance Neil Copley’s report said: “The executive director of children’s services continues to progress the financial sustainability plan to help mitigate the pressures with the intention of reducing the currently reported overspend by the end of the year, recognising that some of the pressures being experienced are outside of the council’s control.

“Whilst the corporate pressures currently being experienced were, in general, anticipated as part of the 2024/25 budget-setting process - with reserves being set aside as appropriate - it is likely that these pressures will continue in perpetuity unless addressed.

“Therefore, executive directors are requested to bring forward action plans to address the pressures within their respective areas to address the current position.

“Furthermore, the council’s medium-term financial strategy is in the process of being updated to reflect any long-term effects of these pressures with a plan to address any resultant gaps being put forward for consideration.

“We are formulating a financial recovery plan to help mitigate these pressures.”

Increasing demand for support for youngsters with special educational needs is posing a ‘financial risk in the current year and beyond’, and inflationary costs and a shortfall in the expected number of children returning to in borough provision have also contributed to the deficit.

The department has approved savings of £2.6m for this year, focusing on reducing agency staff and managing the number of placements.

However, further long-term borrowing has been ruled out unless it is deemed ‘essential’ as finance bosses work to balance the books alongside department heads.

A large chunk of last year’s loan payments - £55m - went towards paying off controversial ‘LOBO’ loans, which effectively are long-term arrangements with variable rate structures.

“As a result, the authority’s remaining long-term debt of £572m consists entirely of fixed-rate loans,” Mr Copley’s report confirmed.

“As borrowing costs have been at their highest since 2008, it is not considered prudent to undertake additional long-term borrowing unless it is deemed essential.

“Temporary reserves and balances can be utilised in lieu of external borrowing until a time when rates begin to fall from their current high levels as forecast.

“This prudent approach allows flexibility to use the under borrowed position to minimise costs and defer long-term borrowing until it becomes less expensive.”

Coun Robert Frost, cabinet spokesperson for core services, said: “Each year it’s getting increasingly difficult to balance the council’s budget.

“The demand for and cost of providing essential council services that the public need outweighs the funding we receive.

“We have seen significantly more demand for children’s and adult social care services with these services alone costing £47m more.

“That would stretch any organisation - our focus in Barnsley is to continue to deliver excellent services while investing in the borough.

“When we set a balanced budget for 2024/25 we also set aside some monies for unforeseen events, so despite the continuing challenges which we face, the majority of which are national issues.

“We’ve had to make some tough decisions already and we’ll continue to do everything possible to manage the financial challenges to keep delivering the services the people of Barnsley need.”