Health check shows predicted overspend of £2.5m

Dudley Council’s latest financial health check reveals a £2.5m overspend but officials say there is no cause for alarm.

A report for a meeting of the authority’s cabinet on September 18 shows an increase in the council’s predicted spending for the year from £367.4m to £369.9m.

The extra forecast spending is due to an increase in the number of children requiring residential placements along with rising costs in the sector.

Clare Williams, Dudley’s interim head of financial services, said: “The corporate budget includes a budget to manage in-year budget pressures which is sufficient to fund the forecast overspend should no significant additional pressures emerge by the end of the financial year.”

Councillors will be encouraged by extra cash going into the authority’s reserves including £2.5m which had been earmarked to deal with problems related to the now defunct Black Country Innovative Manufacturing Organisation (BCIMO) which developed very light railway technology at its research centre in Dudley.

BCIMO collapsed in July 2025 and finance chiefs say the money is unlikely to be used and can go into reserves along with the £5m already set aside for the council’s piggy bank.

The council’s reserves are predicted to be £36.3m by the end of the financial year which is £18.9m more than was forecast when the council budget was agreed in February 2025.

Ms Williams’ report says: “Whilst this is an improved position and will support the overall financial resilience of the council, this level of reserves is still well below the average of all metropolitan borough councils which stands at around 20 percent of annual income.”

The council is aiming to make a total of £56.3m of new savings in the current year and the report says £50m is on track to be delivered, £10.2m is at risk of non-delivery while £900,000 will not be delivered and alternatives are being sought.

Cllr Patrick Harley, leader of Dudley Council said: “Financially Dudley is secure and not at threat of bankruptcy. However, we must continue the outstanding work by our adult social care teams who have really turned things around. 

“Social care costs for both adults and children’s can bankrupt many authorities. I believe we have turned the corner on adult social care but there are real dangers with the ever-increasing cost of looked after children, the High Needs Block and home to school transport. 

“All these issues need reform and change to ensure help goes to those children and families that really require it. 

“That will result in tough decisions being taken that will not be popular with everyone. Clearly this type of change requires cross party working to ensure any change is permanent and finances stable.”