Mounting social care costs have plunged an east London borough's budget £20 million into the red, with a risk that the deficit could rise further.
Senior councillors at Barking and Dagenham Council said budgets were failing to "keep up" as a result of "horrendous" private care home charges. Driven by growing demand and price hikes, the local authority expects an overspend of £20.5 million on care provision during this financial year.
Children's and adult social care overspends
The Labour-led council is on course to spend £13 million more on children's social care than it planned when it set its annual budget in February. It blamed the extra spending on increased demand and rising costs, including the price of private care home placements and the complex needs of the children placed in them.
Jane Jones, the cabinet member for children's social care, said staff were doing "everything they can" to keep spending down. However, in an update to council leaders on Tuesday, Ms Jones said: "We have seen such horrendous hikes in service charges for placements and things like that, that the budgets are just not keeping up."
In addition, the council's adult social care service is on course to spend £9.7 million more than planned. It also put this down to high demand for care, and rising costs, particularly for people in "high cost" care homes.
Housing and overall financial position
Meanwhile, the council's housing service is forecast to overspend by £2.5 million due to increasing demand for temporary homelessness accommodation. The predicted overspend is partially offset by other departments spending less than planned, leaving a net overspend of £20.5 million.
Council officers, in published papers, said: "The council continues to face significant financial pressure arising from increasing demand for social care, rising provider costs and volatility in the use of high-cost temporary accommodation." They added that, with four months to go before the end of the financial year in March, there is an "inherent risk that demand-led costs will continue to rise". The papers also warned that unforeseen spending or drops in income "could further worsen the council's financial position".
Dominic Twomey, the council leader, said "protecting the most vulnerable" in the borough remained "massively important" despite the budget pressures. He said councils are "grossly underfunded in social services", and that the predicted overspend is "clearly not a position we would like to be in".
National context and next steps
Councils across the country are struggling to cover rocketing costs in social care and temporary accommodation. These are services that local authorities are required to provide by law.
Prime Minister Andy Burnham is preparing to publish his 10-year plan for the UK before Christmas, with the blueprint set to include more details on his vision for a national care service that is expected to roll out more funding for old-age care.
