Dorset Council faces £5.3m overspend

Dorset Council is forecasting a £5.3 million overspend by the end of this financial year, despite efforts to tighten spending across all departments.

The latest financial report warns of continued pressure on the authority’s long-term sustainability, though the position has slightly improved since the previous forecast.

The shortfall represents around 1.3% of the council’s £417 million budget, driven mainly by escalating costs in adults’ and children’s social care, which together account for £7.8 million in unbudgeted pressures.

Portfolio holder for finance Councillor Simon Clifford told Cabinet that some costs in children’s services had risen by 22%, while some adult care costs were now falling.

Delays in delivering savings from the Our Future Council transformation programme have also created a further £3.3 million shortfall.

Senior managers have released £3.5 million in contingency funds and imposed stricter financial controls, including limits on discretionary spending.

The Dedicated Schools Grant deficit is forecast to reach £148 million, posing cashflow risks, although this remains separate from day-to-day accounts. Dorset’s ‘Safety Valve’ agreement with the Department for Education is currently under review, with no funding changes expected before 2028.

Children’s Services is facing the largest overspend at £4.9 million, followed by the Birth to Settled Adulthood service at £1.7 million and Adults and Housing at £1.06 million.

In contrast, the Place Directorate is projecting a £1.67 million underspend, largely due to staff vacancies.

Council reserves are forecast to fall from £114 million to £82 million by the end of the year but will stay above the minimum threshold.

With the budget gap for 2026/27 expected to widen, the council says it will continue reviewing services and strengthening financial controls to deliver future savings.