Middlesbrough Council is forecasting an overspend of £4.482m at the end of the financial year, if no further action is taken.
The confirmation comes in papers going to the council’s executive meeting, due to take place on Wednesday, 3 September. Documents explain that if there is no further action, there will be an overspend which equates to 3.1% against the approved revenue budget, with the overall revenue budget valued at £143.304m.
The council is legally required to set a balanced budget ahead of the start of each new financial year, which took place for the current 2025/26 financial year, more than six months ago in February.
This time last year, in September 2024, the council was also predicting an overspend, however it was a lower figure of £3.7m, with Councillor Nicky Walker, the executive member for finance, explaining at the time that the figure equated to 2.8% of the budget as projected overspend. It is worth noting that the council came in at the end of the financial year with an underspend of more than £2m.
An initial figure, listed as the end of quarter one forecast for the 2025/26 outturn, is an overspend of £10.677m, however this figure will not materialise according to executive papers. The documents said: “If actions to reduce this are not successful, the proposed use of central contingencies 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 deemed to be ideal, with limited central contingencies remaining for the rest of 2025/26, if actions to reduce the overspend are not successful. Additionally, part of the £6.195m figure would involve using the remaining balance of the Middlesbrough Priorities Fund (more than £2m). Council directorates are being encouraged to “make every effort” in order to reduce their forecast overspends and achieve a balanced budget.
The council will be hoping to see a repeat of last year’s pattern. As the 2024/25 financial year went on, forecasts showed the projected overspend rapidly decreasing to a point where there was a predicted marginal underspend, followed by the final figures which showed a larger underspend, meaning that not all of the pre-agreed exceptional financial support from central government needed to be used by the council to deliver on 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.
