REDUCING the number of children in residential care will help a Gwent council address a projected £3.5 million overspend. 

Torfaen Borough Council’s children’s services reported in September spending was on course to go £3.2m over its annual budget. That has now risen to £3.3m and continues to make up the bulk of a predicted £3.5m end of year deficit. 

Steps to reduce that were outlined to the ruling Labour cabinet at its Tuesday, October 8 meeting which as well as bringing some children out of residential care include a clampdown on social services’ taxi budget which could finish £104,000 over budget. 

Jason O’Brien, the council’s director of children and family services, said he has identified seven children who “with the right provision and care in place” he has “confidence can be stepped down” and moved out of residential care. That would reduce the total number to 12. 

The council has already stated an ambition to reduce the numbers of children in care, and those who need residential placements which Mr O’Brien said the council is aware “generally don’t have good outcomes and bounce around the system.” 

It will also provide its own residential placements with the first, a bungalow in Cwmbran, set to open in November which will also deliver a saving. 

Residential placements could cost the council £1.8m more than the £3.9m allocated and placements with external foster agencies could also end up a million pounds over the £1.4m budget. 

The council had anticipated there only being 16 youngsters in residential placements at any one time but increased demand has meant that has seen up to 22 in placements at a time. 

It was anticipated only 22 independent foster placements would be required but the projection is 41 will be needed driven by large sibling groups and an increased number of unaccompanied child asylum seekers, under a national transfer scheme, which due to individual circumstances have required use of independent carers that have exceed income from the central government programme and planned savings. 

Over the year total placements could hit 454 which is 22 more than budgeted for with five “high cost placements” the main reason behind the additional spending. 

The Welsh Government’s “eliminate agenda”, which will prevent for profit operators providing children’s care, is also pushing up costs with demand outstripping supply, though it is anticipated it will deliver savings in the longer term. 

Mr O’Brien told the cabinet: “We are seeing private providers chasing the buck over the next two years before the eliminate agenda and profit-based providers can no longer operate from 2027.” 

As part of the effort to address overspending Mr O’Brien has increased scrutiny of independent foster placements and oversight of all the department’s legal cases. A review of its staffing structure will take place as part of efforts to address the “sustainability” of the service over the longer term. 

Deputy chief executive Nigel Aurelius said the steps outlined could save £500,000 and its “reasonable to assume” the currently overspending adult services and the environment directorate could balance their budgets by the end of the financial year with underspends in some corporate services to produce another half a million pounds. 

Use of contingency budgets could also help meet the overspend and the children’s services £1.4m reserve could then be used, as a priority, along with some other reserves. 

Mr Aurelius said the council will need to keep a tight rein on spending in case the service is still over budget but said the overspend can be addressed. 

He told the cabinet: “It will erode slightly into our financial resilience but at the end of the day it’s why you build financial resilience.”