Schools and social care among Newport’s ‘significant’ budget pressures

Schools, temporary accommodation and social care are among the most “significant” financial pressures Newport City Council is facing, its leader has warned.

Cllr Dimitri Batrouni said the local authority’s revenue budget this year is “broadly on track” but an overspend of nearly £4.2 million is currently forecast across its service areas.

For the city’s schools, which have their own budget, an overspend of £3.5 million has been predicted, and the council will carry out “robust monitoring” to make sure schools do not slip into the red.

The latest revenue budget monitoring report, presented to cabinet members last week, shows an overall overspend of £408,000 after taking into account the council’s contingency budget and underspends in other non-service areas.

But Cllr Batrouni warned it was “not sustainable” to mitigate service area overspends in this way, and said non-service spending “cannot be relied upon indefinitely to offset demand-led pressures”.

The council’s housing services are currently expected to overspend by £2.9 million this year, which the leader said was primarily due to “ongoing pressures” on temporary accommodation, homelessness services, income shortfalls and security costs.

“Despite additional investment in 2026/27 and the previous budget, demand and inflation pressures continue to exceed available resources,” Cllr Batrouni told cabinet colleagues.

An overspend of £1.9 million is being forecast in children’s social care, because of costly residential placements.

Cllr Batrouni said the administration had invested “significant extra money to expand in-house provision” but continues to require a number of more expensive out-of-area placements than originally budgeted for.

Meanwhile, “sustained growth in demand” for support is driving a forecast overspend of more than £900,000 in adult social care.

On schools, Cllr Batrouni said the current picture showed an estimated overspend of £3.5 million, which would bring down school balances from £13 million to £9.4 million by the end of the financial year. 

“Considering the level of recurring spending included within the £3.5 million overspend, there is a risk of further schools entering a deficit position in future years,” he told the cabinet meeting.

“Robust monitoring will be required for the remainder of the year to ensure that schools plan for this… and take the necessary steps to avoid this or minimise the impact.”

However, the council leader noted the budget monitoring report was the first of the financial year, and “there remains a prospect for the position to change”.

“This is normal and common at this stage of the year,” he added.