Herefordshire’s budget deficit could rise to £57 million, unless “mitigating actions” are taken.

In a report to councillors, Herefordshire Council leader David Hitchiner warned the council faces “a gap between resources and pressures of £21.6 million in 2023/24, rising to around £57 million by 2026/27 if no mitigating actions are implemented”.

His report, to be presented at a full council meeting this Friday, says that a combination of factors – uncertainty over central government funding, adult social care reforms, inflation and other cost and demand pressures – “will have a significant impact on the council’s net revenue and capital budgets over the medium term”.

An accompanying report by the council's chief executive Paul Walker says: “There will need to be some hard decisions over the next few months, and we will look for opportunities for where we might make savings corporately across the council and in individual directorates.”


As of March, the council has “useable reserves” of £106 million, down £8.5 million on a year previously, “which were deemed to be adequate to support the 2022/23 budget”, Coun Hitchiner added.

The council will use £11.5 million of this to support the ongoing “transformation” of its troubled children’s services department, his report says.

Other commitments from this pot include £3.75 million on a package of transport measures for the county including implementing 20mph speed limits, agreed at a cabinet meeting last month.

A report prepared for the meeting said the council’s forecast £9.4 million overspend for the current financial year amounted to over 5 per cent of its total 2022/23 revenue budget.

Meanwhile, the council has confirmed that £5 million it had lent to troubled Thurrock Council had indeed been repaid by the due date of last Friday (October 14).

The Essex local authority had become highly indebted to other English councils with loans totalling nearly £700 million, but has gained a temporary reprieve in the form of a £836 million government loan secured this month to enable it to pay these back.