Middlesbrough Council forecasting year-end overspend of nearly £4.5m.

The sum is larger than the expenditure forecast for the same period last year.

Middlesbrough Council anticipates an overspend of roughly £4.5 million by the end of the fiscal year if no additional action is taken.

The confirmation comes in materials for the council’s executive meeting on Wednesday, September 3. According to the documents, if no additional action is taken, there will be a 3.1% overspend against the approved revenue budget, with a total revenue budget of £143.304 million.

The council is constitutionally mandated to establish a balanced budget prior to the start of each new fiscal year, which occurred for the current fiscal year 2025/26 more than six months ago in February.

Last year, in September 2024, the council predicted an overspend, but it was a lesser sum of £3.7 million, with Councillor Nicky Walker, the executive member for finance, saying that the figure equal to 2.8% of the forecast overspend.

It is worth mentioning that the council ended the fiscal year with a more than £2 million budget shortfall.

An early amount, indicated as the end of quarter one prediction for the 2025/26 outturn, is an overspend of £10.677 million, but this figure will not be realised, according to executive papers. The materials stated:

“If attempts to lower this are not effective, the planned use of central contingency and other budgets totalling £6.195m can reduce the forecast overspend to £4.482m (3.1%) at year end.”

This course of action is not viewed optimal, as there are limited central contingencies available for the remainder of 2025/26 if efforts to minimise the overspend fail.

Furthermore, part of the £6.195 million number would be calculated using the Middlesbrough Priorities Fund’s remaining balance (more than £2 million).

Council directors are encouraged to “make every effort” to decrease projected overspends and achieve a balanced budget.

The council will be aiming for a repetition of last year’s results.

As the 2024/25 fiscal year progressed, forecasts showed the projected overspend rapidly decreasing to a point where there was a predicted marginal underspend, followed by final figures that showed a larger underspend, implying that the council did not need to use all of the pre-agreed exceptional financial support from central government to meet its budget.

Currently, adult social care is expecting a near £1.5m overspend at the end of 2025/26, while children’s care has a forecast overspend of £6.672m. Other departments are expecting smaller overspends, with one other costly area currently appearing to be environment and communities, which is anticipating an overspend just shy of £1.9m. A couple of departments are anticipating underspends, including £839,000 in the finance department.

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