City council budget overspend down from £5.1m last year, chief finance officer says

At a recent council meeting, Liberal Democrat cabinet members reviewed the authority’s revenue budget for the period ending June 2025.

The revenue budget covers the council’s day-to-day running costs, including staff, services, maintenance and utilities.

Chris Ward, chief finance officer, said the council faced “significant cost pressures” totalling £8.4m.

Most of this was met through £5.3m of contingency funding, £1.5m from the parking reserve, and surplus investment income, leaving a final overspend of £662,600.

Recent pressures include lower income from the city’s energy recovery facility, reduced Spinnaker Tower profit share, and higher costs for home-to-school transport.

The largest strain remains temporary accommodation, with a forecast overspend of £4.8m . Mr Ward said this was on a “downward trajectory” and expected to reduce further “throughout the year”.

He added the budget shows an “enormous improvement” compared to the same time last year, when the council faced a £5.1m overspend.

Councillor Matthew Winnington, cabinet member for community wellbeing, health and care, highlighted that adult social care (ASC) was now underspent “which is almost unheard of” – having been £3.2m over budget at this point last year.

The report attributes the underspend to fewer people needing care, lower care package costs, and vacant posts saving money. Cllr Winnington also suggested the £320,000 underspend may be linked to the council’s new brokerage system for residential care services.

Portsmouth and local government reorganisation

Councillors also raised concerns about Local Government Reorganisation (LGR), which could see Portsmouth City Council abolished and replaced by a larger authority covering Portsmouth, Fareham, Gosport and Havant.

The Labour government wants to create unitary authorities serving populations of around 500,000, aiming to reduce costs, cut duplication, and improve efficiency.

Portsmouth’s Liberal Democrat administration has argued that the city is financially sound and should be excluded from the shake-up.

Cllr Winnington said: “Even though we are in an overspent position overall we are still in a better state than just about any other authority in the country – that’s just the reality of it.

“Any move to put us into a new authority with any part of Hampshire is going to make that situation significantly worse.”

He also cited a recent Times report suggesting ministers now believe authorities serving 200,000 to 250,000 people may be more cost-effective.

Cllr Steve Pitt, council leader, warned that if Hampshire County Council does not resolve its budget deficit by 2028/29, a new Portsmouth authority could face a £67m shortfall on day one.