Stringent spending restrictions have helped cut Warwickshire County Council's expected deficit by almost two thirds – but only after placing service commitments on hold.

In September the authority reported a near £27 million gap between what it had budgeted to spend on delivering services and anticipated costs. 

That has come down to just under £9.5 million and while that has meant another £5.5 million coming out of earmarked reserves – specified back-up funds – the council now anticipates spending less money and using less of its savings overall.

However, the improved position is not without consequences.

As things stand, £13.5 million is expected to be saved through tighter controls on managing staff vacancies, agency staff and overtime and cutting back on things like catering and hospitality, training and development, attending conferences and external venue hire.

That is more than the £12 million target set out in September but a council report warns that "this position could deteriorate depending on whether service forecasts hold good".

The detail of some of the improved positions highlighted in the council's latest financial reports show that spending commitments have been put on hold.

One example is the £100,000 saved on speeding, road safety and school safety "as a result of in-year staff vacancies which are being held temporarily to support spending controls".

Economy & Skills forecast an underspend of more than £500,000 "largely due to delaying and stopping some activities" in line with the controls and because of staff vacancies, while reduced spending of £158,000 in public health is put down to "an unutilised uplift in the school nursing budget" alongside "decreased demand" for drug and alcohol detox, inpatient treatment and domestic abuse listening services.

Council budgets are made up of a multitude of moving parts with the areas that are spending less than expected more than offset by the more expensive departments with rising demand such as special educational needs and disabilities (SEND) services, home-to-school transport and social care.

The council had budgeted £401 million for delivering all of its day-today services and it now expects to spend an extra £41.6 million – some £5.4 million less than was expected to be two months ago, despite £6.75 million being added to the Dedicated Schools Grant (DSG) shortfall. 

The council started the financial year 2024-25 with £18 million put aside to make up an expected shortfall in DSG funding but Warwickshire's overall gap is now more than £40.6 million for the current financial year alone. The other £22.6 million is being accounted for separately through the statutory override – a mechanism many councils use to prevent the burden being pushed towards other services. 

In addition to that, £1.8 million from investment funds and £7.6 million from earmarked reserves brings down the funding gap to £9.487 million which, if unmitigated, will have to come out of the council's short-term financial risk reserve. 

In April 2024, the council held more than £194 million in reserve overall. If these most recent projections play out as expected, that will come down to £137 million, a position that has improved by £5 million since September. 

The projections and the work to manage the council's finances will be discussed by the cabinet – the panel of Conservative councillors in charge of major service areas – on Thursday (November 14).