DEVON County Council’s projected overspend for this financial year has been reduced after it found millions of pounds of savings and extra income.

In July the authority predicted a potential black hole of £30.5 million plus a potential £10 million because of inflation, with the cost-of-living crisis and increasing demand for help for vulnerable children and adults leading to spiralling costs,

It was accompanied with a warning that the council had “never before faced a combination of demand growth and price shock pressures of this scale.”

And while the underlying estimate has worsened since, a ‘financial sustainability programme’ at county hall has helped to reduce the projected black hole by almost £20 million.

A panel of senior staff are tasked with reducing the “unprecedented” estimated forecast, including finding services and projects that can be “transformed, modernised, remodelled, funded differently, ceased, or postponed.”

In an update report, due to be presented to a meeting of the cabinet later this month – rescheduled because of the queen’s death, the council is now predicting an overspend of £17 million, with a risk of added inflationary costs totalling “more than £10 million.”

A total of £18.6 million in savings and extra income has so far been identified, which includes income from rising interest rates, delaying some in-house IT projects, reducing spending on insurance contributions and emergency provision, and scaling back some targeted funding.

But the report by finance chief Angie Sinclair warns of the ‘very challenging financial position faced by the council,’ such as continuing overspends in some departments – most notably in children’s services.

The updated total also does not include a projected £34.5 million overspend this year on caring for children with special educational needs and disabilities (SEND).

This is because the government has told councils to put SEND overspends into separate ring-fenced accounts for three years while it develops a new funding plan.

But the arrangement ends next April and Devon, along with a number of other authorities, is still waiting to hear from the government about what will happen with the overspends. It is ‘hoped that this will be resolved this month,’ the report says.

Devon’s current ring-fenced overspend on SEND  – effectively debt – is projected to rise to £121 million by next year.

Ms Sinclair will tell the cabinet on Monday 26 September: ‘The formation of the financial sustainability programme is having a positive, immediate and significant impact on the projected overspend. However, the underlying position has worsened since month two and this must be addressed as a matter of urgency.

‘The good work underway must continue at pace and scale to ensure the authority is in the strongest position possible to continue to provide the best services we can within the resources available.’