Torbay Council has been forced to announce an ‘immediate moratorium’ on all non-urgent expenditure.
The council’s first quarter budget monitoring report has forecast an in-year overspend of more than £2.8m due to a ‘substantial increase’ in the number of looked-after children.
Chief executive Steve Parrock said the number of Children Looked After (CLA) has increased by 20% since November 2017 and 10% since the beginning of the financial year.
The council is now responsible for 357 children.
There are a number of other pressures on the council’s budget, including larger than expected numbers of agency staff in key services such as planning which are required to cover staff shortages.
‘In order to protect our reserves we have put in place the moratorium,’ said Mr Parrock.
‘This means that even if an activity or contract is budgeted for, it may be postponed or cancelled if it isn’t urgent or required to meet our statutory duties.
‘Every effort continues to be made to bring forward further efficiency savings and deliver our current transformation projects at pace.’
Mr Parrock stressed that Torbay Council has not run out of money or been forced to use reserves.
‘We have delivered the planned 'year on year' savings and made the necessary cuts as agreed in previous budgets,’ he said.
‘More difficult decisions will need to be made and we will continue to identify options, priorities and solutions to try to meet the expected future financial challenges.’